credits Risky assets / Total assets Net profit / Net assets Net asset /
Risky assets ratios: In order to meet the banks?
risky asset, indicates the competence of the net assets.Balance sheet
excluded risks / Net assets ratios: They are
important for the control of non-cash credits and minimum ratios are valid in
order to rival known level of assets.Follow up
debt receivables / Total credits ratios: One of the
important problems of the banks? is the credits that cannot be collected back
and when they rise by the ratios they can be risky for the financial situations
of the banks. Follow up debt receivables / Total credit ratios are important
indicators of the banks? assert qualities and if it is high, it is a negative
development for the bank. Maximum boarders are put, as it is wanted to be low
as it can be.Net profit /
Net assets ratios: Indicates net asset
profitability.Bank groups
main peculiarities and ratios that differ according to the groups are:State-owned
banks: in addition to the ratios that are used for
all kinds of banks; Cash values / Current liabilities and Cash values /
Deposit ratios are being used. These ratios indicate the banks? sufficiency
to reinsure the deposits and short-term liabilities.Large-scale
private banks: Again for this group Current
liabilities / Cash values ratios are important liquidity indicators. An
upper limit is determined for the Current deposits not to exceed the Total
deposit ratio. Another ratio that is used for all kinds of bank groups
except the state-owned banks is Net interest incomes ratio. This ratio
indicates the banks income assets profitability.Middle /
Small- scale private banks: Cash values / Total asset ratio that is used except for the large scale private banks and
state-owned banks is also an indicator of how liquid are the banks? assets.Foreign
banks: As if their credit policies are the same
with the small-scale private banks, the same ratios are also used for them.Development
banks: They are founded in order to finance the
state investments and they don?t have profit goals, Eximbank doesn?t work with
them.Investment
banks: As if they don?t have a main goal of export
financing, Eximbank doesn?t work with them. RECOMMENDATIONS FOR RISK MANAGEMENTBanking
supervision, which is based on an ongoing analytical review of banks, continues
to be one of the key factors in maintaining stability and confidence in the
financial system. The methodology used in an analytical review of banks that
are in the process of off-site surveillance and on-site supervision is similar
to that of private sector analysts (for example, external auditors or a bank?s
risk managers), except that the ultimate objective of the analysis is somewhat
different. To attain a
meaningful assessment and interpretation of particular findings, estimates of
future potential, a diagnosis of key issues, and formulation of effective and
practical courses of action, a bank analyst must have extensive knowledge of
the particular regulatory, market, and economic environment in which a bank
operates. In short, to be able to do this job well, an analyst must have a
holistic perspective on the financial system even when considering a specific
bank.The practices of
bank supervisors and the appraisal methods practiced by financial analysts
continue to evolve. This evolution is necessary in part to meet the challenges
of innovation and new developments, and in part to accommodate the broader
process of convergence of international supervisory standards and practices,
which are themselves continually discussed by the Basel Committee on Banking
Supervision.? Traditional
banking analysis has been based on a range of quantitative supervisory tools to
assess a bank?s condition. Ratios normally relate to liquidity, the adequacy of
capital, loan portfolio quality, insider and connected lending, large exposures
and open foreign exchange positions. While these measurements are extremely
useful, they are not in themselves an adequate indication of the risk profile
of a bank, the stability of its financial condition or its prospects.The central
technique for analyzing financial risk is the detailed review of a bank. Risk
based bank analysis includes important qualitative factors and places financial
ratios within a broad framework of risk assessment and risk management and
changes or trends in such risks, as well as underscoring the relevant
institutional aspects. Such aspects include the quality and style of corporate
governance and management; the adequacy, completeness and consistency of a
bank?s policies and procedures; the effectiveness and completeness of internal
controls; and the timeliness and accuracy of management information systems and
information support.