Bank L's balance sheet(in millions) is provided below.The bank does not have any off-balance-sheet activity. Please calculate Tier 1 risk-based capital ratio of the bank.
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Bank L's
Please calculate Tier 1 risk-based capital ratio of the bank.
Assets | Liabilities and Equity | ||
Cash | $20 | Deposits | $980 |
Treasury bonds(risk-weight=0) | $40 | Subordinated debentures | $25 |
Mortgate loans(risk-weight=50%) | $600 | Common Stock | $45 |
Business Loans | $430 | Retained earnings | $40 |
Total assets | $1090 | Total liabilities and equity | $1090 |
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- Bank L's balance sheet(in millions) is provided below.The bank does not have any off-balance-sheet activity. Please calculate the total risk-based capital ratio of this bank Assets Liabilities and Equity Cash $20 Deposits $980 Treasury bonds(risk-weight=0) $40 Subordinated debentures $25 Mortgate loans(risk-weight=50%) $600 Common Stock $45 Business Loans $430 Retained earnings $40 Total assets $1090 Total liabilities and equity $1090Give typing answer with explanation and conclusion A bank has the following assets: cash and government bonds of $31.07, government agency bonds of $22.3, mortgages of 66.21, and loans to individuals and corporations of 133.46. According to Basel 1, what is the ratio of the bank's risk-weighted assets to total assets? Express in % to the nearest 0.01%; drop the % symbol. Blank 1. Calculate the answer by read surrounding text.Key information from the balance sheet of Transurban Bank is given below (all numbers are in millions of dollars). Cash Loans Total Assets 40 160 200 a. $0.3600 million O b. $0.2100 million O c. $0.1700 million O d. $0.1400 million e. None of the other options is correct Liabilities and equity 156 24 20 Deposits Long-term debt Equity Total 200 Due to increasing competition, the bank expects its deposits to decrease by $24 million. The average interest earned on the loans is 5 percent and the average cost of deposits is 3.5 percent. Borrowing more debt will cost the bank 4.5 percent in the short term. The bank intends to keep $30 million in cash to meet its liquidity needs and then compensate any shortfall to fund its loans by purchasing liquidity. What will be the cost of using this strategy to meet the expected decline in deposits?
- Consider the balance sheet for Inspired to Thrive (IT) Bank below: Inspired to Thrive Bank Balance Sheet as at December 31, 2021 Assets SLiabilities and Owner's Equity 275 Deposits 1,105 Debts 660 Owner's Equity Reserves 1,550.00 Loans 340.00 Securities 150.00 2,040 2,040.00 What is the leverage ratio of IT bank? Why is this ratio significant to the bank's operation?2. Mean Green Bank started its first day of operations with $10 million in capital. $100 million in checkable deposits is received. The bank issues a $30 million commercial loan and another $30 million in mortgages. The required reserves are 8%.The financial statements for First National Bank (FNB) are shown below: Balance Sheet First National Bank Assets Cash Demand deposits from other FIS Investments Federal funds sold Loans Reserve for loan losses. Premises Total assets $ 540 1,800 4,500 2,295 16,425 (2,025) 2,135 $25,670 Income Statement First National Bank. Interest income Interest expense Provision for loan losses Noninterest income Noninterest expense Taxes a. FNB's earning assets b. FNB's ROA c. FNB's asset utilization ratio d. FNB's spread $3,050 2,020 270 230 510 90 Liabilities and Equity Demand deposits Small time deposits. Jumbo CDs Federal funds purchased Equity Total liabilities/equity % % % $ 5,570 11,100 3,650 2,700 2,650 a. Calculate the dollar value of FNB's earning assets. b. Calculate FNB's ROA. (Round your answer to 2 decimal places. (e.g., 32.16)) c. Calculate FNB's asset utilization ratio. (Round your answer to 2 decimal places. (e.g., 32.16)) d. Calculate FNB's spread. (Round your answer to 2 decimal…
- The financial statements for MHM Bank (MHM) are shown below: Assets Cash and due from banks Demand deposits at other FIS Investments Federal funds sold Loans (less reserve for loan losses of 4,200) Balance Sheet MHM Bank $ 2,100 Liabilities and Equity Demand deposits 2,900 Small time deposits 6,420 Jumbo CDs 3,170 Federal funds purchased 20,390 2,450 Other liabilities Equity $ 37,430 Total liabilities/equity Premises Total assets Income Statement MHM Bank Interest income $ 4,418 Interest expense 2,374 Provision for loan losses 1,900 Noninterest income 880 $ 10,800 10,530 7,850 650 4,130 3,470 $ 37,430 Noninterest expense Taxes 1,155 415 a. Calculate the dollar value of MHM's earning assets. b. Calculate the dollar value of MHM's Interest-bearing liabilities. c. Calculate MHM's spread. (Do not round Intermediate calculations. Round your percentage answer to 3 decimal places. (e.g., 32.161)) d. Calculate MHM's interest expense ratio. (Round your percentage answer to 3 decimal places.…The financial statements for MHM Bank (MHM) are shown below: Assets Cash and due from banks Demand deposits at other FIS Investments Federal funds sold Loans (less reserve for loan losses of 3,400) Premises Total assets Income Statement MHM Bank Interest income Interest expense Provision for loan losses Noninterest income Noninterest expense Taxes a. MHM's earning assets b. MHM's interest-bearing liabilities Balance Sheet MHM Bank $ 2,020 2,100 6,280 3,090 20,260 2,370 $36, 120 C. MHM's spread d. MHM's interest expense ratio $ 4,258 2,224 1,100 800 1,075 335 Liabilities and Equity a. Calculate the dollar value of MHM's earning assets. b. Calculate the dollar value of MHM's interest-bearing liabilities. c. Calculate MHM's spread. (Do not round intermediate calculations. Round your percentage answer to 3 decimal places. (e.g., 32.161)) d. Calculate MHM's interest expense ratio. (Round your percentage answer to 3 decimal places. (e.g., 32.161)) % % Demand deposits Small time deposits…Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 40Deposits 215Loans 160 Securities 40Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
- a) Bank A has the following balance sheet (in millions): Assets Cash Securities Loans Total assets $5 10 55 $70 Liabilities and equity Deposits Equity Total liabilities and equity The bank is expecting a $12 million net deposit drain. $62 8 $70 i) Show the new balance sheet if the bank uses purchased liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities ii) Show the new balance sheet if the bank uses stored liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities.a) Bank A has the following balance sheet (in millions): Assets Cash Securities Loans Total assets $70 The bank is expecting a $12 million net deposit drain. Liabilities and equity Deposits Equity Total liabilities and equity $5 10 55 $62 9 $70 ii) Show the new balance sheet if the bank uses stored liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities.f. ABC Bank has the following balance sheet (in millions) and has no off-balance-sheet exposure. Assets Liabilities and Equity Cash $20 Deposits $960 Treasury bills 40 Subordinated debt 25 Residential mortgages Common stock 45 Business loans 430 Retained earnings 40 Total assets $1,090 Total liabilities and equity $1.090 Total Risk Weighted Assets are $730. i) What is the Tier 1 risk-based capital ratio? ii) What is the Capital Adequacy Ratio (CAR)? iii) What is the Tier 1 leverage ratio?