Matching assets liabilities exercise:

1. This is the Balance Sheet of the X Bank with average figures in 201X (Unit: VND billion)
Assets Cash and deposits due from anks Short$term investment securities )oans to other credit institutions *utstanding loans Of which: Short-term loan "edi#m-term loan %on&-term loan (llowance for loan losses ,-uipment and offices Total Assets Amt 1!200 2!1%0 (00 %!'00 ,2!0 $20 '00 )230) 2%0 9, 00 Liabilities& Equity "emand deposits &ssued short$termvalua le papers Saving deposits Of which: Short-term deposits "edi#m-term deposits Borrowing from other credit institutions Total Liabilities Common stock Surplus .etained earnings Total Equity Total Liabilities & Equity Amt 2!1#0 '(0 #!((0 3,020 !,3!0 1!+00 8,800 '20 +% 1% 800 9, 00

!ncome an" Ex#ense $tatement %Unit: VND billion) in 20!* &nterest and fees on loans &nterest and dividends on securities +otal interest income &nterest paid on deposits &nterest on non$deposit orrowings +otal interest e-pense )et interest income Corporate income ta0 rate of 2%2 3lease calculate4 .*,! .*5! /et interest margin! /et noninterest margin! /et operating margin %,0 mar0s1 %23 2456 789 :;)< T9TAL A$$ET 2=)< :21 a. >9E ? #retax net o#erating income %,*Tax rate1@equity ? ./%,*A+B1@800 >9A ? #retax net o#erating income%,*Tax rate1@ total asset? ./%,*A+B1@9 00 )!M? net interest income@ total asset hoCc earning asset %DEu DFGc1 ? ,-0@9 00 ))M? %net noninterest income* #ro'ision (or loan losses1@total asset ? %*+,*B,1@9 00 )9M? #retax income@ total asset ? ./@9 00 . 6ow much will the ank lose7gain if the interest rate decreases 8 2278earin the ne0t ( month! assuming that value of assets and lia ilities are unchanged! short$term assets ##0 %+ ', (20 (+ 3., ,-0 &ro'ision (or loan losses /oninterest income and fees /oninterest e0penses )et non*interest income &retax o#erating income Securities gains (or losses1 &retax net o#erating income %1 11+ 1(' *+, 8 % ./

and lia ilities are rate sensitive! e0cept deposits due from anks and demand deposits.Calculate the e0pected net interest marginafter ( monthsA %B mar0s1A

Change4 9 $227# :(Short$term investment securities ; Short-term loan- Short-term deposits- &ssued
short$termvalua le papers1 9 $1(.0%

/et interest margin after three month 9 (net interest income c< ; change 17asset 9 (1#0$ 1(.0%17=+00 2. This is a t8pical 8ear for ank >. &ts alance sheet has een as following during the 8ear 5sset .eserve ( month Trade Bills % 8ear fi0ed rate Treasur8 Bonds % 8ear floating$ rate corporate loans 10 8ear fi0ed rate mortgage loans Ci0ed assets 5mount &nterest )ia ilit8 @ 5mount (?S" rate ,-uit8 (?S" mill1 (21 mill1 100 0 Sight deposit 1%00 %00 1 ( months ank A00 deposits #00 ( + months 1000 clients deposits 1A00 12 2# months B '00 fi0ed rate$ clients deposits 1200 1% ,-uit8 200 200 &nterest rate (21 1 % 10 12

This Bank earns this 8ear A2 in fees and commissions &t pa8s this 8ear =% in overhead costsD of this A0 is the overhead cost of the corporate usiness! spread #0 2 for corporate lending and +0 2 for Trade Bills. &t has to provision and amortise #0 for ad loans! of which 10 for losses on mortgage loans! 2% for losses on corporate loans! and % for losses on Trade Bills. a.Ehat is the net interest margin of the ank in a solute amount and in percentageF 9(%00:0.017#;#00:0.0(;1A00:0.12;1200:0.1%1$ (1%00:0.01;A00:0.0%7#;1000:0.172;'00::0.121 92%0.2% /&G9 2%0.2%7earning .Ehat is the return on e-uit8 of the BankF /et income 9 (1$ta01(2%0.2%; A2$=%$#01

.*, 9 net income7e-uit8 c.Ehat is the risk asset ratio (Basel &1 of the BankF Tier 19 e-uit8 ; undivided profit 9 200 ; /& (ko rH cI chia ko nJn giK sL lM ko chia1 Tier 2 9 #0 .isk asset chu8Nn OPi4 02:(cash; T$ ill T ond1 %02(mortgage loan1 1002:(corporate loans1 S?G 9 2#00 C5.9 tier 1; tier 2 7 2#00 d."oes the Bank have an interest rate e0posure! if 8es! which oneF 6ow much will the ank lose if the interest rate increases to 12F ChQuR e.6ow could the ank improve its risk asset ratio (make 2 proposals1 and how would an8 proposal influence 11 its return on e-uit8 and 21 its interest rate positionF
&mprove C5. 4 tang Tier 17 tier 2 hoSc giKm risk asset Tang tier thT lM tUng vVn chW sX hYu! hoSc OZi loZi th[$\ tUng m]u sV e-uit8 ^iKm rish asset $\ giKm /et income do hoZt O_ng `t Oi$\ giKm tL /et income ^iKm .*, &nterest rate position cI khK nUng Oc cKi thian! vT Ob e0posure hcn 4v