Super NOW (Negotiable Order of Withdrawal) account is one type of bank account in which interest rate is tagged with money market dealing interest rate and the rate is lower than the existing money market rate. A minimum deposit amount is required and there is no interest rate ceiling. If money market rate goes up, interest rate also goes up. If money market rate falls, interest rate also falls but never goes below a certain minimum rate of interest.
The following information is for New Bank Ltd. (in million
Tk.): -
Total Income= 1875
Interest Expense = 1210
Total Asset = 15765
Securities gain (loss) = 21
Earning Asset = 12621
Total liabilities = 15440
Taxes = 16
Shares = 145000
Non-Interest Income = 501
Non-Interest Expense = 685
Provision for Loan Loss = 381.
Calculate: ROE, ROA, NIM, EPS, NNIM, Net
Operating Margin.
= Interest Income + Non Interest Income + Securities Gains -
Interest Expense - Non Interest
Expense – Taxes – Provision for Loan Loss
= 1875 + 501 + 21 – 1210 – 685 – 16 – 381
= 105
Total Equity
= Total Assets – Total Liabilities
= 15765 – 15440 = 325
ROE
= Net Income / Total Equity
= 105 / 325
= 32.30% ROA
= Net Income / Total Assets
= 105 / 15765
= 0.66% NIM
= (Interest Income – Interest Expenses) / Earning Assets
= (1875 - 1210) / 12621
Net Income = Interest Income + Non Interest Income + Securities Gains - Interest Expense - Non Interest Expense – Taxes – Provision for Loan Loss
= 1875 + 501 + 21 – 1210 – 685 – 16 – 381 = TK. 105 M
Total Equity = Total Assets – Total Liabilities
= 15765 – 15440 = TK. 325 M
Debt= Deposit Account+ Bills Payable+ Borrowings (from Other or any Bank)
******* Contra will not count (Ignore)
Equity= Share Capital + Profit and Loss + Reserve Fund and other Reserves+ Surplus
Debt Equity Ratio or Burden%= Debt/Equity
Net Interest Income NII= Interest Income-Interest Expense
= (Interest on Advances+ Interest on Investment)-0)
Non Interest Income = Commission, Exchange and Brokerage+ Others Revenue+ Profit on sale on Investment
Non Interest Expenses = Salary+ Allowance+ MD’s Fee + Legal Fees + Sales Expenses +
Printing& Stationary + Postage & Telegram + Repair & Maintenance Net Non Interest Income =Non Interest Income- Non Interest Expense (Operating Income (Interest Income-Interest Expenses+ Other Income) - Operating Expenses (All Expenditure excluding Interest Paid and Provision))
ROE= Return on Equity = Net Income / Total Equity = 105 / 325 = 32.30% ROA = Return on Asset= Net Income / Total Assets = 105 / 15765 = 0.66%
NIM = Net Interest Margin= (Interest Income – Interest Expenses) / Total Assets
= (1875 - 1210) / 15765 = 665 / 15765= 4.21%
EPS = Earnings Per Share = 105,000,000 / 145,000 = Tk. 724.14 per share
Net Non Interest Margin = (Non Interest Income – Non Interest Expenses) / Total Assets
= (501 – 685) / 15765 = (184) / 15765 = - 1.16%
Here,
Total Operating Income = Int. Income + Non Interest Income
= 1875 + 501 = TK. 2376 M
Total Operating Expenses = Int. Expenses + Non Int. Expense + Provision for Loan Loss
= 1210 + 685 + 381 = TK. 2276 M
Net Operating Margin = (Total Op. Income – Total Op. Expenses) / Total Assets
= (2376 – 2276) / 15765 = 0.63%
= 665 / 12621
= ?%
EPS = Net Income / No of Shares = 105,000,000 / 145,000 =
Tk. 724.14 per share
Net Non-interest Margin
= (Non-interest Income - Non-interest Expenses) / Earning
Assets
= (501 – 685) / 12621
= (184) / 12621
= ?% Here,
Total Operating Income
= Int. Income + Non Interest Income
= 1875 + 501 = 2376
Total Operating Expenses
= Int. Expenses + Non Int. Expense + Provision for Loan Loss
= 1210 + 685 + 381
= 2276
Net Operating Margin
= (Total Op. Income – Total Op. Expenses) / Total Assets
= (2376 – 2276) / 15765
= 0.63%