Sunday, April 28, 2019

Financial Markets and Bank Management Essay Example | Topics and Well Written Essays - 1000 words - 1

Financial Markets and Bank vigilance - Essay ExampleThe sticks are faced with credit risk that involves change in crystalise summation value due to changes in the ability of the counter-party to meet the contractual agreements (Thomas 2005). Performance risk includes the possible loses that whitethorn emanate from dishonest employees while operational risk include costs such as unfitness to meet regulatory requirements or settlement failures (Rao 1999).The slangs net profit margin for 2012 was prejudicial due to lack of growth of the non-customer interest income. The net profit margin was positive in 2013, scarce the current miserable interest environment prevailing in the market will continue maintaining the net interest income growth rate low. This means that the bank should divest the low-yielding non-core assets like investment securities portfolios in mark to scale up the banks net interest margin. The operating margin was too low to generate substantial increase in net profits in 2013.The return on invested neat growth rate stagnated thus demonstrating imprudent investing strategy due to low returns from the non-core business segments. The improvements in return on assets and return on equity were low while the leverage position declined middling due to injection of additional capital through rights issue.The stringent regulatory environment forced the bank to improve on its capitalisation and implement measures of lowering its leverage. Some of the measures implemented include the rights issue and decline in the risk-weighted assets (RWAs) (Gregory 2011).Barclays loan to deposit ratio stood at 110 percent in 2012, except the ratio declined to 101 percent in 2013. The deposits were almost equal to the customer loans thus demonstrating increased wariness in retail lending. The investment banking business segment is funded by a high proportion of liabilities. The bank should have sufficient liquid assets to withstand any market and internal st resses (Mehta and Fung

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