建设银行资金管理

BankFundsManagementLecture#2BankFundsManagement2BankFundsManagementPrimaryobjectiveofthefinancialmanagerofanyprivatesectorfirmistocreateshareholderwealthbyincreasingthemarketvalueofthefirmThisentailsmakingdecisionsinfourspecificareasofmanagement:WorkingcapitaldecisionsCapitalbudgetingdecisionsFinancing&capitalstructuredecisionsDividenddistributiondecisionsBankFundsManagement3TypesofFinancialDecisionsCorporateFinancialMgmtWorkingcapitaldecisionsCapitalbudgetingdecisionsFinancing&capitalstructuredecisionsDividenddistributiondecisionsBankFinancialMgmtLiquidityandinterestratedecisionsCreditandcostmanagementdecisionsFundingandcapitalaccountmanagementdecisionsCapitalaccountmanagementdecisionsBankFundsManagement4BankCoVersusMakeCoBalanceSheetBankCoCash4%Deposits92%Securities12%Subordinateddebt:debentures2%Loans80%PreferredShareholders’equity2%Equipment,land&premises4%CommonShareholders’equity4%TotalAssets100%TotalLiabilities100%BalanceSheetMakeCoCash0%AccountsPayable10%Securities2%Debt:Shortterm15%Inventories15%Debt:Mediumterm15%AccountsReceivable20%Bonds:Longterm20%Equipment,land&premises63%CommonShareholders’equity40%TotalAssets100%TotalLiabilities100%BankFundsManagement5ComparingBankCo&MakeCoBalanceSheetsBankCo’sliquidityisrelativelyhigh(16%)comparedtoMakeCo’s(2%).BankCo’sassetsaremostlyloans(80%);MakeCo’sassetsaremostlyequipment,landandpremises(63%).BankCohastotaldebtsequalto94%ofitsassets.MakeCo’stotaldebtequals60%ofitsassets.BankCo’scommonshareholder’sequityequals4%ofassets;MakeCo’sequityequals40%ofassets.BankFundsManagement6IncomeStatementsofBankCo&MakeCo(%ofTotalAssets)BankCoMakeCoInterestIncome10%Sales100%-InterestExpense(7%)-CostofGoodsSold(60%)Netinterestincome3%GrossMargin40%+Otherincome1%Totalincome4%-Interestexpense(5%)-Provisionloanlosses(1%)3%35%-Non-interestexpense(2%)-Non-interestexpense(25%)Netincomebeforetax1%Netincomebeforetax10%-Incometax(.4%)-Incometax(4%)Netincome.6%Netincome6%BankFundsManagement7ComparingBankCo&MakeCoIncomeStatementsBankCo’sincomeis4%oftotalassets;MakeCo’sgrossmarginis40%.BankComakes25%ofitsincomefromfees&commissions;MakeCohasnosimilarincomeitem.BankCoshowsaprovisionforloanlosses;MakeCo’s(muchsmaller)creditriskisduetoitsA/RBankCo’soperationsarehumancapitalintensive(salariesmakeupabout2/3oftotalnon-interestexpense);MakeCo’soperationsarecapitalintensive(highdepreciationexpense).BankCo’sROAis.6%;MakeCo’sROAis6%.Conclusion:bankingisahighvolume,lowmarginbusinessBankFundsManagement8DupontFinancialAnalysisROE=ROAxLeverageWhere:ROE=NetIncome/Commonshareholders’equityROA=NetIncome/TotalAssetsLeverage=TotalAssets/Commonshareholders’equityBankCoMakeCoROA.6%6%Leverage25times2.5timesROE15%15%BankFundsManagement9UnderstandingDupontROE=(ROA)x(Leverage)ROA=OperationalRiskTotalincomeornon-interestexpensefluctuatesinresponsetoeconomicconditions&therebyimpactsnetincomeLeverage=FinancialRiskIncreasingleverageincreasespotentialreturnbutalsoincreasesfinancialriskROE=TotalRiskChangesinoperational&financialriskcombinetoinfluencetotalriskofaccountingreturnstoshareholders.BankFundsManagement10FiveCriticalManagementVariablesLiquiditymanagementInterestrateriskmanagementCapitalaccountmanagementCost(Productivity)managementCreditriskmanagementAllimpactonProfitabilityBankFundsManagement11TheBank’sFinancialObjectiveObjective:Maximizeshareholder’swealthHow:MaximizethePVofearningsdistributedtobankshareholdersBankFundsManagement12TheBank’sFinancialObjectiveTomaximizeshareholderwealth,thebankmust:stabilize&increaseafter-taxincomeachieveacompetitiverateofreturnonitsassetsachieveacompetitiverateofreturnonitsequityThisimpliesthatthebankmustdevelop&marketanattractiveportfoliooffinancialproductsandservices.BankFundsManagement13ToCompeteEffectively...Thebankmustdevelopanattractiveportfolioofproducts&services:BorrowerBankLenderAttractiveportfolioofliabilitiesAttractiveportfolioofassetsBankFundsManagement14TheProfitPlanningProcessObjectivesScreentheEnvironmentChoosingProfitmax.InternalEnvironmentOrganizational-strengths-values-weaknesses-beliefsCreateExternalEnvironmentEconomicchoicesshareholder-profitopportunities-specificmarketsvalue-competitivethreats-specificproducts&servicesSpecificfinancialgoalsBankFundsManagement15ExternalForcesofChangeTechnologyrisk-investmentsmustbemadetodayinarapidlyevolvingworldRegulatoryrisk-strategicchoiceshavetobemadewithoutfullknowledgeoffutureregulatorychangesInterestRateRisk-themarketvalueofthebank’sassets&liabilitiesaredrivenbymarketinterestrates,overwhichtheyhavenocontrolCompetition-deregulationisallowingallfirmstocompeteinallmarketsCapital-capitalrequirementsaredrivenbybothnationalandinternationalregulatorychanges.Nowhavetoholdcapitalagainstbothcreditandmarketrisk.Whataboutinterestraterisk,liquidityrisk,etc?BankFundsManagement16Risks&ProfitsExpectedBankProfitsFinancialLeverageInterestRateRiskSolvencyRiskCreditRiskPositionRiskForeignCurrencyRiskOverheadRiskRegulatoryRiskTechnologyRiskOperationalRiskLiquidityRiskInflationRiskBankFundsManag