Asset and Liability Management

PPT4B
ASSET & LIABILITY

MANAGEMENT IN
COMMERCIAL BANKS
ALM
Assett
Liability
Asset
Management
Liability
Management
ALM
bsenver@superonline.com
ASSET & LIABILITY

MANAGEMENT (ALM)
DEFINITION
ALM is continuously arranging and
rearranging the assets and liabilities
of the bank without infringing the
liquidity and safety of the bank and
with the purpose of maximizing the
banks profits.
ALM
LIQUIDITY
The ability of a bank to fulfill its
obligations, and after doing so
having enough cash left to do its
normal daily banking business.
ALM
SAFETY
The ability of a banks Share
Holders Equity (SHI) to absorb the
future possible losses that may arise
and after doing so having enough SHI
left to run the bank and to comply
with the minimum Capital
Requirements.
ALM
Capital protects your bank

in rainy days!..
ALM
ALM DEVELPOMENT
1950s
1960s
1970s
ASSET
MNG.
LIABILITY
MNG.
ASSET &
LIABILITY
MNG.
LOAN
PRODUCTS
DEPOSIT
PRODUCTS
LOAN &
DEPOSIT
BOTH
ALM
Internet
Personal Training
Office Automation
Computerization
Management
Reorganization
GAAP
SC of Accounts
Deregulations
ALM
Yesterday
Tomorrow
Arena
Services
Organizatio
n
&
Reporting
Data
ALM
NEW DEVOPLEPMENTS
1. Deregulation of Interest Rates
2. Deregulation of Foreign Exchange
Operations
3. Changes in Laws and
Regulations
4. Increase in Deposit Interest Rates
ALM
10
NEW DEVELOPMENTS
5. Increase in Deposit Interest
Rates
6. Change in Deposit
Characteristics
Increase in Term-Deposits
Decrease in Demand-Deposits
Increase in Short Terms

ALM
11
NEW DEVELOPMENTS
7. Increase in Personnel Expenses
8. Increase in Operating Expenses
9. Increase in Technology
Investments
10. Frequent Changes in Interest
Rates
11. Increase in Share Capital
Requirements
ALM
12
NEW DEVELOPMENTS
12. Change in Asset Structure
Increase in Government Bonds
Increase in Treasury Bills
Increase in Foreign Exch. Loans
Increase in Short Term Loans
Increase in Non-Performing Loans
Increase in Consumer Loans

ALM
13
NEW DEVELOPMENTS
13. Decrease in S/H Equity Growth
14. Increase in Customer
Expectations
15. New Service Points
Small Branches
ATM and POS
Telephone and Internet Banking

16. 24 Hours 365 Days Banking
ALM
14
1950
1970
1980
2000
RELATIONSHIP
MANAGEMENT
SALES FORCE
SPACE
SHARING
IN-STORE
BRANCH
BRANCH
DATABASE
MARKETING
DIRECT
MAIL
MAIL
CREDIT
CARD
FRANCHISE
BRANCHES
REMOTE
RELATIONSHIP
MANAGEMENT
CALL CENTER
OUTBOUND
CALL CENTER
INBOUND
DEBT
CARD
ATM
SMART CARD
INTERNET
ATM
KIOSK
TELEPHONE
BANKING
Kaynak: A.T.Kearney
1990
VIDEO
KIOSK
SCREEN
PHONES
PC
INTERNET
ALM
BANKING
BANKING
INTERACTIVE
TV15
FINANCIAL STATEMENTS
1. BALANCE SHEET
2. STATEMENT OF INCOME
3. STATEMENT OF
SHAREHOLDERS EQUITY
4. SOURCES & USES OF
FUNDS STATEMENT
ALM
16
Balance Sheet
Liabilities
Assets
Earning
Assests
Interest Income
Deposits
Loans
Interest
Income Statement
Interest
Bearing
Treasury Bills Liabiliti
es
Interest Expences
Debt
Net Interest Income

NonInterest
Bearing
Liabiliti
Share Holders
es
Equity
NonInterest
Earning
Assests
Total Assets
Total ALM
Liabilities
17
Balance Sheet
Deposits
100
120
Interest
Bearing
Liabiliti
es
Treasury
Bills
80
Debt
Non-
35
Total Assets
Interest
Rate
Assets
=
%20
60
NonInterest
Earnin
g
Assests
Interest Income
Liabilities
Assets
Loans
Interest
Earning
Assests
Income Statement
Interest
Bearing
Liabiliti
Share Holders
Equity
es
30
35
Interest
Rate
Liabiliti
es
=
36
Interest Expence
9
Net Interest Income
27
%5
Total Liabilities
ALM
18
BALANCE SHEET
SHOWS
The Financial
Position of a Bank
As at a specific
date.
As of Dec.
31,1998
ALM
19
BALANCE SHEET
EQUATION
= 100
100
ASSETS
Equals
LIABILITIES
+ Plus
SHAREHOLDERS
EQUITY
ALM
20
ASSET CLASSIFICATION
TO TAL
ASSETS
N O N IN T E R E S T E A R N IN G
ASSETS
IN T E R E S T E A R N IN G
ASSETS
ALM
21
LIABILITY
CLASSIFICATION
TO TAL
L IA B IL IT IE S
IN T E R E S T B E A R IN G
L IA B IL IT IE S
N O N IN T E R E S T B E A R IN G
L IA B IL IT IE S
ALM
22
BALANCE SHEET Assets
Liquid Assets
Loans
Marketable Securities
Investment Securities
Fixed Assets
Accrued Interest
Other Assets
Total Assets
ALM
150
400
200
50
100
70
80
1050
23
BALANCE SHEET
Liabilities
Deposits
Bank Borrowings
Accrued Expenses
Other Liabilities
Bonds Issued
Shareholders Equity
Total Liabilities & S/HE
ALM
400
150
100
80
70
250
1050
24
SHAREHOLDERS EQUITY
Share Capital
Legal Reserves
Retained Earnings
Revaluation Surplus
Share Premiums
Net Income
Total S/H Equity
ALM
100
30
50
20
10
40
250
25
BALANCE SHEET
DOES NOT SHOW
Interest Rates
Interest Sensitivity
Due Dates
Foreign Currency
breakdown
Collateral
ALM
26
STATEMENT OF INCOME
SHOWS
The results of
operations of a
bank.
For the period

between two dates.
For the year ended
Dec. 31 , 1998
ALM
27
NET PROFIT
N E T P R O F IT
TO TAL
IN C O M E
TO TAL
EXPEN SE
ALM
28
TOTAL INCOME
TO TAL
IN C O M E
N ET
IN T E R E S T
IN C O M E
N ET
N O N - IN T E R E S T
IN C O M E
ALM
29
NET INTEREST INCOME

N ET
IN T E R E S T
IN C O M E
IN T E R E S T
IN C O M E
(+ )
IN T E R E S T
EXPEN SE
(-)
ALM
30
interest
income
net interest
income
net interest
income
interest
expense
ALM
time
31
NET INTEREST INCOME

N ET
IN T E R E S T
IN C O M E
IN T E R E S T
IN C O M E
P /L
IN T E R E S T
EXPEN SE
P /L
IN T E R E S T
E A R N IN G
ASSETS
B /S
IN T E R E S T
B E A R IN G
L IA B IL IT IE S
B /S
ALM
32
NET NON-INTEREST
INCOME
N ET
N O N - IN T E R E S T
IN C O M E
N O N
IN T E R E S T
IN C O M E
(+ )
N O N
IN T E R E S T
EXPEN C E
(-)
ALM
33
STATEMENT OF INCOME
Interest Income
1000
(700)
300
220
(450)
70
(30)
40
Interest Expense
Net I.Income
Non Interest Income
Operating Expenses
Pre-Tax Profit
Tax Provision
Net Income
ALM
34
ANALYSIS OF PROFIT
NET
P R O F IT
(N P )
P R O F IT F R O M
B A N K IN G O P E R A T IO N S
(N E T O P E R A T IN G IN C O M E )
( N O I)
P R O F IT F R O M
E X T R A O R D IN A R Y
T R A N S A C T IO N S
(P E X T )
ALM
P R O F IT F R O M
S E C U R IT Y
T R A N N S A C T IO N S
(P S T )
35
BANKING
RISKS
ALM
36
BANKING RISKS
C AMEL
A
M
E
L
ALM
37
CAMEL
Capital
Adequac
y
ALM
38
AMEL
Asset
Quality
ALM
39
CA
MEL
Managem
ent
Quality
ALM
40
EL
CAM
Earnings
Efficiency
ALM
41
CAME
Liquidity
Risk
ALM
42
CAMEL RISKS
Capital Adequacy
Asset Quality
Management
Earnings
Liquidity
ALM
43
BANKING RISKS
1.2.3.4.5.CAMEL
6. Credit Risk
7. Interest Rate Risk
8. Interest Rate Sensitivity Risk
9. Foreign Exchange Availability Risk
10. F/X Position Risk
ALM
44
BANKING RISKS
11.
12.
13.
14.
15.
16.
17.
Accounting & Reporting Risk

Computer Risk
Capital Market Operations Risk
Money Market Operations Risk
Country (Sovereign) Risk
Pricing Risk
Market Risk
ALM
45
BANKING RISKS
18.
19.
20.
21.
22.
23.
24.
Theft Risk
Fraud & Defalcations Risk
Natural Disasters
Strategic Risk
Fiduciary Risk
Transaction Risk
Regulatory/Compliance
ALM
46
BANKING RISKS
25. Reputation Risk
26. Large Loans/Deposits Risk
27. Concentration Risk
ALM
47
RATIO ANALYSIS
Numerator
______________________
Denominator
ALM
48
RATIO ANALYSIS
Balance Sheet
__________________
Balance Sheet
Income
Statement
________________
Balance Sheet
ALM
49
RATIO ANALYSIS
What is the
What is the
LEVEL ?
TREND ?
ALM
50
RATIO ANALYSIS
1.
2.
3.
4.
5.
Capital Adequacy
Asset Quality
Management
Earnings & Efficiency
Liquidity
ALM
51
RATIO ANALISIS
CAPITAL ADEQUACY
The Capital of a Bank protects the
Bank against unexpected future
losses.
ALM
52
RATIO ANALYSIS
CAPITAL ADEQUACY
1.
Shareholders Equity
-----------------------------------Total Assets
The ability of the present Capital to

support the further growth of Assets
ALM
53
RATIO ANALYSIS
CAPITAL ADEQUACY
2.
Shareholders Equity
-----------------------------------Risk Weighted Assets
ALM
54
RATIO ANALYSIS
CAPITAL ADEQUACY
3.
Shareholders Equity
-----------------------------------Risk Weighted Assets
+
RW Contingent Liabilities
ALM
55
RATIO ANALYSIS
CAPITAL ADEQUACY
4.
Total Debt
-----------------------------------Shareholders Equity
The ability to raise additional Debt

Capital
ALM
56
RATIO ANALYSIS
CAPITAL ADEQUACY
5. Financial Leverage :
Total Assets
-----------------------------------Shareholders Equity
ALM
57
RATIO ANALYSIS
CAPITAL ADEQUACY
6. Capital Formation Rate :
Retained Net Income (RNI)
-------------------------------------------------
Average Shareholders Equity
RNI = Net Income - Dividends to be paid
The internal growth of Equity Capital
ALM
58
RATIO ANALISIS
ASSET QUALITY
1.
Loans
-------------------------------
Total Assets
ALM
59
RATIO ANALISIS
ASSET QUALITY
2. Non Performing Loans =
a) Loans past due more than 90

days
b) Loans not accruing interest
c) Loans with low interest rates
d) Loans on which repayment

terms
have been renegotiated.
ALM
60
3.
Loans
RATIO ANALISIS
ASSET QUALITY
Non Performing
------------------------------------
Total Loans
Indicates how much of the loan
portfolio is non performing.
ALM
61
RATIO ANALISIS
ASSET QUALITY
4. Reserves for Non Performing
Loans
---------------------------------------------
Non Performing Loans
Indicates the ability of the loan loss
reserve to absorb potential losses from
currently non performing loans.
ALM
62
5.
RATIO ANALISIS
ASSET QUALITY
Loan Loss Provision
------------------------------------
Average Loans
Shows current income reduction in
anticipation of loan losses.
ALM
63
6.
RATIO ANALISIS
ASSET QUALITY
Net Charge - Offs
------------------------------------
Average Loans
Shows current income reduction in
anticipation of loan losses.
ALM
64
RATIO ANALISIS
ASSET QUALITY
7.
Interest Earning
Assets
-----------------------------------------------
Total Assets
ALM
65
RATIO ANALISIS
ASSET QUALITY
8.
Non Interest Earning

Assets
-----------------------------------------------
Total Assets
ALM
66
RATIO ANALISIS
EARNINGS & EFFICIENCY
A Bank with no
profit is like a
human body
with no blood.
ALM
67
THE PRIMACY OF
EARNINGS
A bank can not sustain itself long
without a positive cash flow.
Earnings are essential to :
1.Absorb loan losses
2.Finance internal growth of capital
3.Attract investors to supply capital
ALM
68
RATIO ANALISIS
1. Return on Assets ( ROA )
Net Income
-------------------------------------------
Total Average Assets
ALM
69
RATIO ANALISIS
2. Return on Equity ( ROE )
Net Income
-------------------------------------------
Average Shareholders
Equity
ALM
70
RATIO ANALISIS
3. Return on Equity ( ROE )
ROE =
ROA
Multiplier
ROE = ( NI / AST ) *
SHEQ )
ALM
Equity
( AST /
71
RATIO ANALISIS
4.
Interest Income
-------------------------------------------
Average Interest Earning
Assets
ALM
72
RATIO ANALISIS
5.
Net Interest Income
-------------------------------------------
Average Total Assets
ALM
73
RATIO ANALISIS
6.
Interest Income on
Loans
-------------------------------------------
Average Total Loans
ALM
74
RATIO ANALISIS
7.
Total Operating Expense
-----------------------------------------------
Total Operating Income
ALM
75
RATIO ANALISIS
8. Efficiency Ratio
Non Interest Expense

-------------------------------------------------- Net Interest Income + Fees
Commissions
ALM
76
RATIO ANALISIS
9. Break Even Ratio
Total Expenses - Non Interest

Income
-------------------------------------------------- Total Average Interest Earning
Assets
ALM
77
RATIO ANALISIS
10. Net Free Funds Ratio
Non Paying Liabilities - Non
Earning
Assets
------------------------------------------------
Interest Earning Assets
ALM
78
RATIO ANALISIS
11. Interest Rate Sensitivity Gap :
Interest Rate Sensitive Assets

( minus )
Interest Rate Sensitive

Liabilities
Shows the net amount to be effected by
the future change of interest rates in the
market
ALM
79
RATIO ANALISIS
12. Interest Rate Sensitivity Gap
Ratio :

Assets
------------------------------------------------
Liabilities
ALM
80
RATIO ANALYSIS
LIQUIDITY
Inadequate Liquidity of a Bank may

cause an accident similar to an
airplane crash !
ALM
81
RATIO ANALISIS
LIQUIDITY
1.
Loans
------------------------Deposits
ALM
82
RATIO ANALISIS
LIQUIDITY
2.
Liquid Assets
------------------------Deposits
ALM
83
RATIO ANALISIS
LIQUIDITY
3.
Liquid Assets
-------------------------------
Deposits +
Borrowings
ALM
84
RATIO ANALISIS
LIQUIDITY
4.
Assets Due for the

Period
----------------------------------------
Liabilities Due for the
Period
ALM
85
RATIO ANALISIS
LIQUIDITY
5.
Net Large Liabilities
----------------------------------------
Net Earning Assets
Both numerator & denominator are net
of short-term assets.
Measures the extent to which net
earning assets would be effected by the
loss of a banks large liabilities.
ALM
86
RATIO ANALISIS
LIQUIDITY
6.
Liquid Assets
----------------------------------------
Large Liabilities
Measures the assets readily available
to cover a loss of large liabilities.
ALM
87
RATIO ANALISIS
LIQUIDITY
7.
Core Deposits
----------------------------------------
Earning Assets
Indicates the extend to which earning
assets are funded by those deposits
considered stable and not subject to
interest rate disintermediation.
ALM
88
RATIO ANALISIS
LIQUIDITY
8.
Brokered Deposits
----------------------------------------
Earning Assets
Measures the extent to which a bank
is funding assets with high-priced
and volatile brokered deposits.
ALM
89
MATURITY ANALISIS
Days
Cash
Loans
0-10
100
200
300
Deposit 400
Borrow 150
550
10-30
200
500
700
300
200
500
30-60
300
200
500
800
200
1000
ALM
60-90
50
100
150
20
30
50
90
MATURITY ANALYSIS
ALM
91
OFF - BALANCE SHEET

RISK
1.
Loan Commitments
----------------------------------------
Average Assets
Shows the extent of a banks
obligation to make loans.
ALM
92
OFF - BALANCE SHEET

RISK
2.Contingent Liabilities &
Commitments
---------------------------------------------------
Average Assets
Shows the extent of a banks commitments
& contingent liabilities.
ALM
93
I manage
Assets!
% rates,
due dates...
RISKS
I manage
Liabilities
% rates,
due dates...
ALM
94
ASSET & LIABILITY MATCH
ALM
95
A & L Match
Amounts
Currency
Due Dates
Interest Rates
Interest Sensitivity
Volatility
ALM
96
Foreign Exchange Position

USA $ Short Position
$Liabilities>$Assets
USA $ Long Position

$Assets>$Liabilities
ALM
97
F/X Position Strategy

Increasing
F/X Rates
Decreasing
F/X Rates
Long Position
YES
NO
NO
YES
Short Position
ALM
98
Interest Rate Sensitivity

Assets/Liabilities
IRSA/L are such assets and Liabilities
whose interest rates will change
before their due dates when there is
a change in market interest rates.
ALM
99

Assets & Liabilities
Interest Rate
Non-Sensitive
Assets & Liabilities
VARIABLE RATES
ALM
FIXED RATES
100

Gap
Positive Gap
IRSA>IRSL
IRS GAP =
(IRSA IRSL)
Negative Gap
IRSL>IRSA
ALM
101

Strategy
Interest Rates
Will Increase
Interest Rates
Will Decrease
Positive
IRS GAP
YES
NO
Negative
IRS GAP
NO
YES
ALM
102
INTEREST MARGIN
INCREASING THE
INTEREST
MARGIN %
ALM
103
INCREASING INTEREST
MARGIN
Interest Income..200
Interest Expense( 50 )
--------- INTEREST MARGIN.. 150
----------
ALM
104
$
interest
income
net interest
income
net interest
income
ALM
interest
expense
time
105
INCREASING THE
INTEREST MARGIN
BAN K STR ATEG Y TO
IN C R E A S E T H E
IN T E R E S T M A R G IN
IN C R E A S E
S IZ E
C H AN G E
IN T E R E S T
SPR EAD
ALM
ALTER
A S S E T /L IA B IL IT Y
M IX
106
INCREASING THE
INTEREST MARGIN
BANK STRATEGY
Increase Size
ACTION
1.Expand Assets
2.Reduce Fixed
Assets
3.Increase Equity
Base
ALM
107
INCREASE THE
INTEREST MARGIN
BANK STRATEGY
Change
Interest
Spread
ACTION
1.Re-Price
Asset Portfolio
2.Re-Price
Liability Portfolio
ALM
108
INCREASE THE
INTEREST MARGIN
BANK STRATEGY
Alter
Asset /
Liability
Mix
ACTION
1.Plan Taxes
2.Reduce Liquidity
3.Increase
Aggressiveness
4.Change Asset
Yield
Sensitivity
5.Change Liability
Cost Sensitivity
ALM
109
INCREASE THE
INTEREST MARGIN
BANK STRATEGY
Increase Size
ACTION
Expand Assets
IMPLEMENTATION
1.Offer new Products
and Services
2.New
Loans/Deposits
2.Open new Branches
3.Expand Promotion
Budget
4.Reduce Interest
Spread
ALM
110
EXPAND ASSETS
REPERCUSSION
1.Increase
operating
Expenses
2.Need for Capital
3.F/A Regulations
4.Decrease Capital
Ratio
5.Reduce ROA
IMPLEMENTATION
1.Offer new Products
and Services
2.New
Loans/Deposits
3.Open new Branches
4.Expand Promotion
Budget
5.Reduce Interest
Spread
ALM
111
INCREASE THE
INTEREST MARGIN
BANK STRATEGY
Increase Size
ACTION
Increase
Equity Base
IMPLEMENTATION
1.Reduce Dividend
pay out
2.Offer Dividend
reinvestment
3.Sell Stock
4.Establish Employee
Stock Ownership PL
ALM
112
INCREASE EQUITY BASE

REPERCUSSIONS
1.Hurt shareholders
2.Double taxation S/H
3.Reduce ability to
leverage ROA,
dilution of earnings
4.Continued
Employee
Expectations
IMPLEMENTATION
1.Reduce Dividend
pay out
2.Offer Dividend
reinvestment
3.Sell Stock
4.Establish Employee
Stock Ownership PL
ALM
113
INCREASE INTEREST
MARGIN
BANK STRATEGY
Change Interest
Spread
ACTION
Re-price Portfolio
IMPLEMENTATION
1.Increase rates on
Loans
2.Compound return
more frequently
3.Reduce rates on
Deposits
4.Compound cost
less
frequently
ALM
114
REPRICE PORTFOLIO
REPERCUSSIONS
1.Lose business
Loan quality decrease
2.Increase operations
Client dissatisfaction
3.Lose business
Liquidity problem
4.Increase operations
Client dissatisfaction
IMPLEMENTATION
1.Increase rates on
Loans
2.Compound return
more frequently
3.Reduce rates on
Deposits
4.Compound cost
less
frequently
ALM
115
INCREASE INTEREST
MARGIN
IMPLEMENTATION
BANK STRATEGY
Alter
Asset/Liability
Mix
ACTION
Reduce Liquidity
1.Minimize cash
2.Minimize due from
3.Sell Securities &
Bonds
4.Increase short
term
Deposits
ALM
116
REDUCE LIQUIDITY
REPERCUSSION
IMPLEMENTATION
1.Liquidity Risk
2.Lose
correspondent
3.Incur book losses
1.Minimize cash
2.Minimize due from
3.Sell Securities &
Bonds
4.Increase short
term
Deposits
4.Increase volatility
of
deposits
ALM
117
INCREASE INTEREST
MARGIN
BANK STRATEGY
Alter
Asset/Liability
Mix
ACTION
Increase
Aggressiveness
IMPLEMENTATION
1.Increase
loan/deposit
ratio
2.Increase highest
yielding loans
3.Increase highest
yielding securities
ALM
118
INCREASE
AGGRESSIVENESS
REPERCUSSION
1.Increase need for
capital
2.Increase loan
losses
3.Increase security
losses
IMPLEMENTATION
1.Increase
loan/deposit
ratio
2.Increase highest
yielding loans
3.Increase highest
yielding securities
ALM
119
INCREASE INTEREST
MARGIN
BANK STRATEGY
Alter
Asset/Liability
Mix
ACTION
Change Asset
Yield Sensitivity
IMPLEMENTATION
1.Increase S/T &
variable rate assets
if rates will
increase
2.Decrease S/T &
if rates will
decrease
ALM
120
CHANGE ASSET YIELD

SENSITIVITY
REPERCUSSION
1.Wrong estimate
of interest
movement,
thereby reducing
interest spread
IMPLEMENTATION
1.Increase S/T &
if rates will
increase
2.Decrease S/T &
if rates will
decrease
ALM
121
INCREASE INTEREST
MARGIN
BANK STRATEGY
Alter
Asset/Liability
Mix
ACTION
Change Liability
Cost Sensitivity
IMPLEMENTATION
1.Decrease S/T &
variable rate
liabilities if rates
will increase
2.Increase S/T &
variable rate
will decrease
ALM
122
CHANGE LIABILITY COST

SENSITIVITY
REPERCUSSION
1.Wrong estimate
of interest
movement,
thereby reducing
interest spread
IMPLEMENTATION
1.Decrease S/T &
variable rate
will increase
2.Increase S/T &
variable rate
will decrease
ALM
123

Asset and Liability Management

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Asset and Liability Management

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PPT4B

ASSET & LIABILITY

ASSET & LIABILITY

Capital protects your bank

Increase in Short Terms

Increase in Government Bonds

Increase in Treasury Bills

Increase in Foreign Exch. Loans

Increase in Short Term Loans

Increase in Non-Performing Loans

Increase in Consumer Loans

ATM and POS

Telephone and Internet Banking

Net Interest Income

BALANCE SHEET Assets

For the period

NET INTEREST INCOME

NET INTEREST INCOME

Accounting & Reporting Risk

The ability of the present Capital to

The ability to raise additional Debt

Retained Net Income (RNI)

a) Loans past due more than 90

b) Loans not accruing interest

c) Loans with low interest rates

d) Loans on which repayment

Loan Loss Provision

Net Charge - Offs

Non Interest Earning

Net Interest Income

Total Operating Expense

Non Interest Expense

Total Expenses - Non Interest

Interest Rate Sensitive Assets

Interest Rate Sensitive

Interest Rate Sensitive

Inadequate Liquidity of a Bank may

Assets Due for the

Net Large Liabilities

OFF - BALANCE SHEET

OFF - BALANCE SHEET

ASSET & LIABILITY MATCH

Foreign Exchange Position

USA $ Long Position

F/X Position Strategy

Interest Rate Sensitivity

Interest Rate Sensitivity

Interest Rate Sensitivity

Interest Rate Sensitivity

INCREASE EQUITY BASE

CHANGE ASSET YIELD

CHANGE LIABILITY COST

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