‘Economics is One lesson’ Essay Example
Interest income; (9,236,309-10,151,445)/ 10,151,445*100%=-9.01%. This negative percentage value is not recommended and thus, the bank should engage in rigorous marketing campaigns to attract more customers into borrowing interest based loans.
Interest expense; (2,977,163-3,436,433)/ 3,436,433*100% = -13.36%. This negative percentage decrease is recommended. It postulates that the bank has sought other sources of finances as opposed to borrowings.
Income from Islamic financing and investment products; (1,325,163-1,281,565)/ 1,281,565*100%= 7.80%. This positive increase is recommended. The bank should ensure that the product is catapulted by enough campaigns to attract enough clientele base.
Distribution to depositors and profit paid to Sukuk holders; (672,669-738,318)/ 738,318*100% = -8.89%. This decrease in the value is not recommended. The bank should ensure that the amount of increased in order to attract more clients.
Fee and commission income; (1,877,459-1,856,760)/ 1,856,760*100%= 1.11%. This increase the percentage value is recommended since it increases the overall net income of the bank.
Fee and commission expense: (146,283-107,700)/ 107,700*100%=35.82%. This increase in the percentage value is not recommended since it has the effect of decreasing the overall net income.
Net gain/loss on trading securities; (70,550-139,635)/ 139,635*100%=-49.47%. This negative percentage value is not recommended since it ascertains that the bank has incurred loss on its trading securities.
Other operating income; (1,498,491-1,062,418)/ 1,062,418*100%=41.04%. The increase in the percentage value is recommended aspect. The bank should ensure a higher figure is maintained in order to increase on the net income of the company.
General and administrative expenses; (3,668,812-3,507,734)/ 3,507,734*100%= 4.59%. This increase in the value of the item is a negative aspect. The bank should ensure that these costs are minimized by cutting down on unnecessary personnel.
Amortization of intangibles; (80,000-93,860)/ 93,860*100%= -14.76%. This negative percentage value is recommended. The bank should ensure that higher figures are eliminated.
Net impairment loss on financial assets; (4,003,908-4,969,843)/ 4,969,843*100%= -19.44%. This decrease in the percentage value is not recommended since it implicates that the bank made a loss on its financial assets held.
Impairment and share of profit/loss of associates and joint ventures; (110,119-653,992)/ 653,992*100%= -83.16%. This negative percentage value is not recommended given that it postulates a possible loss on the assets held on joint ventures.
Taxation charge: (15,237-25,867)/25,867*100%= -41.09%. The negative percentage value is recommended since it has little effect on the taxable income of the bank. However, it should be understood that the taxation is an external influence that cannot be altered by the bank.
In conclusion, it can be seen that banks operate in different ways in comparison to other business. This means that different items regardless of whether they are placed within the assets or liabilities section might depict a whole different meaning altogether.
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