MFI MATH

The following information is for XYZ Bank Ltd. (in million Tk.): -

Total Income= 2250

Interest Expense = 1452

Total Asset = 18918

Securities gain (loss) = 25

Earning Asset = 15145

Total liabilities = 18528

Taxes = 20

Shares = 145000

Non Interest Income = 600

Non Interest Expense = 820

Provision for Loan Loss = 455.

Calculate: ROE, ROA, NIM, EPS, NNIM, Net operating margin. 

Solution:

 Net Income

= Interest Income + Non Interest Income + Securities Gains - Interest Expense - Non Interest

Expense – Taxes – Provision for Loan Loss

= 2250 + 600 + 25 – 1452 – 820 – 20 – 455

= 128 million

Total Equity

= Total Assets – Total Liabilities

= 18918 – 18528 = 390 million

ROE

= Net Income / Total Equity

= 128 / 390

= 32.82 % ROA

= Net Income / Total Assets

= 128 / 18918

= 0.68 % NIM

= (Interest Income – Interest Expenses) / Earning Assets

= (2250 - 1452) / 15145

= 798 / 15145

= 5.27 %

EPS = Net Income / No of Shares = 128,000,000 / 145,000 = Tk. 724.14 per share

Net Non-interest Margin

= (Non-interest Income - Non-interest Expenses) / Earning Assets

= (600 – 820) / 15145

= (220) / 15145

= ? % Here,

Total Operating Income

= Int. Income + Non Interest Income

= 2250 + 600 = 2850

Total Operating Expenses

= Int. Expenses + Non Int. Expense + Provision for Loan Loss

= 1452 + 820 + 455

= ?

Net Operating Margin

= (Total Op. Income – Total Op. Expenses) / Total Assets

= (2850 – ?) / 18918

= ? %

MFI Math (Nov-2011)

 4(c)

 i) Net Interest Income = Interest Income - Interest Expense = (80,000+15,000) - 19,500 = Taka

75,500 thousands.

 ii) Net Non-interest Income = Non-interest Income - Non-interest Expenses

=(20000+2000+8000) - (7500+3500+2000+2500+25000) = 30000 - 40500 = (10500)

 iii) Net Interest Margin = (Interest Income – Interest Expenses) / Total Assets = (95000 -

19500) / 682500 = 11.06%

 iv) Operating Efficiency Ratio = Total Operating Expenses / Total Operating Income = (19500+7500+3500+2000+2500+25000) / 125000 = 48%

 v) PLL% = Provision for Loan Losses / Loans = 7500 / 295000 = 0.0254 or 2.54%

 vi) Burden% = (Non Interest Op Expenditure - Non Interest Income)/ Average Assets = [(7500+3500+2000+2500+25000) - (20000+2000+8000)] / 682500 = 1.53%

 vii) ROA = Net Income / Total Assets = 65000 / 682500 =9.52%

 viii) ROE = Net Income / Total Equity = 65000 / (200000+115000+130000) = 14.60% ix) Equity Multiplier (EM) = Total Assets / Total Equity = 682500 / 445000 = 1.53 times x) Equity to Asset Ratio = Total Equity / Total Assets = 445000 / 682500 = 65.20%