The Usefulness Of Study Of Bank Cost And Efficiency

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

Banking industry is highly competitive as there is high exit barrier. Moreover, competitors are large and quite equally balanced. Additionally, as banking industry has emerged for hundred years, just about everyone who needs banking services already has them.

The key financial indicators for evaluating financial performance of any bank are Profit Before Tax, Capital Ratio, Adjusted Gross Leverage, Loan Funding Ratio, Net income, Assets and Liabilities, Equity and Share Holders return.

Banking is an old aged idea. It was around in the ancient Mesopotamia era. Martin A. Armstrong states, Mesopotamia illustrated all the modern practices such as, deposits, interests, loans, and letters of credit.” Armstrong also mentions how the ancient Egyptians showed signs of the banking. To quote Armstrong, “Egyptian sources also show that a vibrant banking industry emerged whereby the state provided warehouses in which farmers deposited their grain. In turn, the farmer would receive a “deposit receipt” reflecting how much wealth was held by the bank in question. Such written receipts eventually became used as a general method of making payment of debts to third parties during the Ptolemy era including trade, taxes and donations to the gods.” These banking ideas can be linked to money and how money has changed the power of people and countries. It can be proven throughout the history of that money, power, and banks are directly related. The banks and money relate to power because the more economic strength a country has the more they can do military wise. It can also be proved over time that money and power create issues that can be counterproductive to society.

Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2005). Bank-specific, industry-specific and macroeconomic determinants of bank profitability (32026). Retrieved from Munich Personal RePEc Archive website: http://mpra.ub.uni-muenchen.de/32026/1/MPRA_paper_32026.pdf

3.2.1 Bank X’s Capital Adequacy ......................................................................... 29 3.2.2 Bank X’s Asset Quality ................................................................................. 30 3.2.3 Bank X’s Management ................................................................................. 31 3.2.4 Bank X‘s Earning ......................................................................................... 32 3.2.5 Bank X’s Liquidity

When evaluating the financial performance of various banks one must turn to the financial statements that they supply each year to the public as required by the Comptroller of the Currency, the Federal Deposit Insurance Corporation ( FDIC) and the Securities and Exchange Commission (SEC), if it is a publicly traded bank. The annual 10K report that is filed with the SEC along with the corporate websites of the financial institutions that are being looked at are good places to obtain the data necessary to evaluate growth for specific bank and to be able to compare it to other banks.

As previously said in the introduction, this paper intends to survey the latest performance of banks belong to the financial industry. The samples are selected by the nation’s economic place in the world, this method can be better explained by the formula below, the GDP figure is from the World Bank’s 2015 GDP ranking statistics.

When making a financial analysis on a bank, the type of business it conducts need to be considered. Specialization can lead a bank to operate in different practices and have a varied structure of their balance sheet. If the structure and composition of the bank is not to be considered, financial statement analysis will provide misleading information. This report will investigate the implications of bank specialization on its financial statement analysis.

Private banking industry has changed in a very basic way, driven by many key factors such as: free competition systems, modern developments in information technology (in particular, developments of the internet), and changing demographics. Private banks now operate in an environment shaped by increasing and shifting regulations, and in markets influenced by the uncontrolled situations of the world economy and geopolitical issues.

Commercial banking centers are going through drastic changing times. Nationwide most major banks are gradually closing their branches. Across the country banks are disappearing. The rise of technology and convenience of smart phones is making retail banking an uncertain career choice. The one area that needs to be focused on is what goes on inside a commercial bank, because for many financial centers, it has been the image to the public.

There have been two broad schools of thought when it comes to measure and assess the competition in banking sector. The first, and classical, concept evolved from the Smithian school of economics. This view hold the firm belief that the competition is not what can be created, it happens. Measuring competition is measuring the position of equilibrium in the private and state sectors, as well as in the private and private sector. In an ideally competing banking sector, according to Smith (1776), all the banks have equal opportunities and equal offerings to the society, in such a way that selecting one outfit over other will amount to no difference. On the other hand, the second school of thoughts, regards competition in banking as something that has to be actively ‘injected’ into the banking sector. This involves regulations, laws and overseeing bodies. There are many statistical and analytical methods of measuring competition among banks, some of which are discussed here.

The structure of the banking industry has undergone sweeping changes in the past two decades. In response to heightened competition from non-bank financial firms enabled by technological progress among

The main aim of this report is to identify the key roles played by bank capital in the banking business. This report briefly outlines the main functions of bank capital and takes a brief look at the benefits of bank capital to the bank and the banking industry. It is hoped that from reading this paper a general understanding of the roles of bank capital in the banking business can be gained.

21  7.1)The Role of Reserve Bank of India (RBI) – Banker’s Bank: ......................................................... 23  7.1.1)Main Objective: ................................................................................................................. 23  8)Co‐operative Banks: ........................................................................................................................ 26  8.1)There are two main categories of the co‐operative banks. ....................................................... 27  8.1.1)Features of Cooperative Banks .......................................................................................... 27