What are the processes for measuring and evaluating the performance of a financial institution

 Evaluating a Bank's Performance

A.     Determining Long-Range Objectives

B.     Maximizing The Value of the Firm: A Key Objective for Nearly All

Financial-Services Institutions

C.     Profitability Ratios: A Surrogate for Stock Values (Many small banks do not have   an active stock market and product or geographic

subsets of a bank do not have stock prices.)

1.     Key Profitability Ratios (ROE, ROA, NIM, NIMPLL, EPS, Efficiency Ratio, Fee Income Ratio)

2.     Interpreting Profitability Ratios

D.     Measuring Risk in Banking and Financial Services (pp. 181-188) We will not cover these now but will cover them in detail in the appropriate places during the semester. (Credit Risk, Liquidity Risk, Market Risk, Interest-Rate Risk, Foreign Exchange & Sovereign Risk, Off-Balance Sheet Risk, Operational (Transactional) Risk, Legal and Compliance Risk, Reputation Risk, Strategic Risk, and Capital Risk)

 

 Key Performance Indicators among Banking’s Key Competitors (NOTE: when an income statement item for a period is combined with a balance sheet item for a specific time the average of the balance sheet item for the income statement period should be used.)