Comparative Analysis of Commercial Banks Liquidity Position: the Case of Tanzania

Overall the liquidity of the company is very stable, THI working capital is healthy and the company is able to support its short term business needs in an efficient manner.

The sizable amount of Short-Term Investment, almost 4 times greater than its peer, make Net-Noncore Dependence $250,000 ratio to be negative at -3.18 percent compare with its peers of 12.98 percent. The same effect also applies to Net-Noncore Dependence $100,000 ratio which the bank is at -2.80 and peers are at 15.56 percent. JPMorgan Chase’s liquidity risk from a low-level core-deposit could be offset by the holding of a substantial amount of liquid assets which could conveniently transfer to cash to counter the effect of deposit outflow.

Ratios are useful to evaluate a firm’s financial statements and one can also compare their performance with other firms, or the industry average.

In comparing the companies to each other it is important to take into account the liquidity or ability of a firm to meet its current obligations, and solvency

Make core customers’ deposit to invest in illiquidity assets, this action can lower the risk of withdraw in an economic stagnation or even recession period, also more stable than waiting the wholesale funds to be paid.

The Low capital base of the banks called in for some serious changes in the regulatory and financial laws of the country. This called for the Basel norms which determine the adequacy of the banks liquid assets

We wish to present to you a research report regarding commercial banks and new capital regulation prepared through collective collaboration between members of group 26.

All the recommendations and suggestions that will be provided by this study would be helpful for the management of the National bank and Allied bank of Pakistan, in taking decisions related to their business processes, assets management, loans and other areas. This study would be beneficial for the investors, shareholders, creditors, state bank and government, because it shows the performance of the bank. In this way Shareholders would be able to know the performance of bank, profits and also know about those factors which are not significant for success of bank. New investors will attract if study proves that bank is working excellent. Overall this study will provide comprehensive information about financial performance of National bank and Allied bank of Pakistan; through the help of this research other banks can also know about those factors which largely contribute in the enhanced financial performance of a

Liquidity for a bank means the ability to meet its financial obligations as they become due. Liquidity at a bank is a measure of its ability to readily find the cash it may need to meet demands upon it. Liquidity can come from direct cash holdings in currency or on account at the Federal Reserve or other central bank. More commonly it comes from holding securities that can be sold quickly with minimal loss.. Thus one of the main challenges to a bank is ensuring its own liquidity under all reasonable conditions and its one the commercial banking principle also “Principle of Liquidity”.

Ratios analysis is used in creating benchmarks for comparative analysis. Though ratio analysis should be used to compare companies within the same industry, it can be used in cross-section analysis.

The financial crisis 2007/08 led to the fact that some large financial institutions were under threat to collapse and had to be bailed out by the government to avoid a total meltdown of the financial system. The financial crisis was triggered by a combination of factors; some of them were the lack of regulations and supervision, excessive leverage practice, insufficient liquidity provision and a lack of adequate capital holdings by the banks. This report will focus on two different concepts bank’s capital and liquidity, explaining the importance of both for banks, how they link and interact with each other, and the risks banks could face in case of any potential shortfalls in these key areas. A shortfall in one of these

Scholars are often used to measure the performance of indicators including ROE and s ' Q Tobin, ROE is the net assets yield; Tobin 's Q (= the market value of the company / asset replacement cost) is used by foreign scholars of the index, the index is reverse (Chen Goh, 2005). Referring to the market value of a company, because of the special nature of the securities market and the ownership structure of the commercial banks, the domestic scholars generally not used. And just use these two single indicators not fully reflect the business objectives of the commercial banks’ needs, nor it is suitable for the measurement of the operational performance of China 's commercial banks. This paper uses commercial banks ' net assets yield (X1), earnings per share (X2), liquidity ratio (X3), loan to deposit ratio (x4), non-performing loan ratio (x5), the capital adequacy ratio (x6), the main business income growth rate (X7), net profit growth rate (x8), total assets growth rate (x9), nine specific indicators to measure explained variables, which as the comprehensive performance of the commercial banks. Because the four aspects of the nine indicators were reflected in the executive level of financial banks "profitability", "liquidity", "debt paying ability" and "growth" and on the performance of commercial

Over the last several years, the banking sector has been facing a number of challenges. This is because many of the loans that were made went into default (which had an impact on their balance sheet). As a result, regulators have been forced to seize different lenders to prevent a system wide collapse. This is important is showing, how the kinds of loans that are underwritten by banks will have an impact on their profit margins. To fully understand what is happening requires examining how the market value of a bank's investments / loans will have an effect on capitalization. This will be accomplished by: comparing a bank with a firm that is not involved in the financial services industry, understanding how this could impede retail functions, studying the significance of capital ratios and discussing possible trade offs in relation to current events. Together, these elements will offer specific insights about how the investment and loan activities of the bank will have an impact on their liquidity position. ("Failed Bank List")

Subsequently, with the successful recapitalisaion programme and the acquisition of another bank in 2005 and equity increased, the bank embark on rapid domestic expansion as the competition in the sector intensified in the domestic market. With the increased capital the bank growth strategy was to diversify their operations into new business areas to strengthen their market positions at home and abroad as explained by the interviewees: With the additional capital that the bank brought from the recapitalisation program, it also strengths our ability to expand our business beyond our first point of call which was Benin ((Beta_g2 December 2015). The bank expansion strategy is enhanced specifically through its business and retail banking strategy for example the strategy entails the

Banks occupy a critical position in a complex financial system that supplies the money and credit needs of the economy. The unique characteristic of a commercial bank is that it also creates money, and it is this particular feature of the commercial banks which distinguishes them from non-banking financial institution.