Question

based on these ratios/growth rates of a bank. what can you say about the financial health of the bank?

Growth Rates (2018-2019) Cash & Due from Banks Growth (2018-2019) Investments Growth Loans- 1 Yr Growth Rate Assets-Total Growth 1375.26% -14.15% -1.81 % 1.35% 0.739% 23.079% 14.26% 9.78% Deposits Growth Long Term Debt Growth Total Debt/Total Assets Common Equity/Total Assets Total Shareholders' Equity/Total Assets 9.78%

Answer 1

Solution:

From the above data, Cash & Due from Banks Growth is positive , that is it is 1375.26 times than its actual growth despite having negative growth in investments, speaks volumes about the operational efficiency thereby improving the cash and receivable position that is improving the current asset position and ultimately improving the total assets.

The debt position is within the range.

To sum up from the above figures:

a) High liquidity

b) High Solvency and reduced reliance on debts as it reflects in the negative loan growth rate.

c) Strong Market sentiments over this bank as the deposit rate is growing.

d) only flip side is the better investment and portfolio allocation , since the investment growth is negative.