Bank analysis is simple. Financial Analysis of the Bank Profitability of Assets and Capital

Freedom of choice with modern economic conditions should be supported by confidence in the reliability of the partner. Sometimes there is not enough internal assessments for making important decisions and an assessment of independent experts is necessary. This role in today's society is played by the rating system.

Rating banks (English Bank Rating) is the main method of assessing the activities of banks based on the analysis and comparison of financial performance and bank balance data. Criterion of comparison can be: voluminous indicators characterizing the range of development of the bank; Qualitative indicators characterizing the degree of reliability of the bank.

The main approaches to the assessment of the activities of banks:

• * own analysis of other banks of participants in the interbank market;
• * independent examination of banks with specialized banking agencies;
• * Rating assessments of supervisory authorities are most objective.

From a wide range of credit ratings, bond ratings first appeared. And so far, many scientists suggest that their bond yield is more related to the rating rather than with publicly available data. Bond ratings do not reflect other risks, in particular, the percentage, associated with investments in bonds, and also do not provide a recommendation to buy or sell specific securities.

In the twentieth century, a new indicator of business reputation occurs - credit rating. His developer was the analyst and publisher John Moody in 1900. The newly invented system made it possible to determine the difference between bonds released by 250 US railway companies. Later, this system was distributed to the Moody Company (Moody "s), as well as competing entrepreneurial groups, municipal bodies, banks, and then on independent states.

Ratings can be called one of the analysis options, which allows to obtain a cumulative assessment of the financial state of commercial banks and compare them in the most accessible form for all categories of citizens. Several groups of participants in the financial market are interested in obtaining such an assessment: banks, bank customers - legal entities and individuals, banking supervisory authorities.

It should also be noted that, as a rule, the emergence of rating agencies was caused with the rapid development of financial markets. At the present time, these agencies are actively created in developing countries.

• * "Positive" - \u200b\u200bthe rating may increase;
• * "Negative" - \u200b\u200bthe rating may decrease;
• * "Stable" - a change is unlikely;
• * "Developing" - possible both raising and lowering rating.

This list contains both domestic banks and banks with average indicators in the financial ranking. Nevertheless, it can be noted that in most of these banks are able to cope with their debt obligations if it were not for the impact of adverse changes in economic conditions. And forecasts reflecting the direction of the future development of the Bank almost everyone stopped at the stable position.

The bank analytics portal "Analysis of Banks" prepared a financial analysis of the Legion Bank.

Analysis of more than 60 economic indicators reflective: bank creditworthiness, liquidity and reliability (highly liquid assets, current obligations, liquidity indicator during the year), structure and dynamics of balance (revenue assets, loans issued by loans, the structure of interest obligations), property deposits , profitability, own agents and other indicators.

Analysis of financial activities and statistics Over the past year, Akb "Legion" (AO) indicate the absence of negative trends that can affect the financial stability of the Bank in the future.

The reliability and the current financial condition of the bank can be raised by the "very good" assessment.

Statistics for negative factors:
number of indicators of unreliability - 0;
number of indicators of instability - 0.

Reference:
The Banking Analysis Portal "Analysis of Banks" is a professional online resource for analyzing the financial statements of Russian banks. The project started in 2011. Created by consulting company Asoft Consulting.
The source data is published by the Central Bank of Russia the reporting of banks in forms 101, 102, 123, 134, 135. It is also possible to load specific reporting of banks (for example, forms 110) and the calculation of official forms (for example, forms 806, 807).

Definition 1.

Commercial Bank is a credit institution that carries out settlement, payment, deposit operations for individuals and legal entities. At this stage, the formation of the economic sphere of banks are the main tool for the development of market relations.

The development of entrepreneurial activities, an increase in the amount of funds growing interest in non-residents to operations in the Russian market leads to the fact that a significant amount of cash resources are accumulated and redistributed in commercial banks.

Active activities of Russian banks in the interbank market, securities market, currency and resources, the transition to an international accounting account plan has led to the fact that banking structures need financial analysis, which are tested in Western countries. However, this analysis should be carried out in accordance with the requirements of the country's current legislation.

Note 1.

The purpose of the financial analysis of the commercial bank is to confirm its reliability as a counterparty, for other banks. The main tasks of the analysis of the activities of the commercial bank are to determine the implementation of the requirements for the liquidity of the organization, identifying the sources and quality of bank revenues, as well as maintaining the level of sufficient capital of the bank.

Basic criteria for financial analysis of a commercial bank

Analysis of liquidity, profitability and capital adequacy makes it possible to assess the correctness and effectiveness of the management of the commercial bank resources, therefore, analyze the prospects for its work and competitiveness in the financial market.

When carrying out a financial analysis of a commercial bank, the following criteria are taken into account:

• whether economic standards are being implemented, which are established by applicable law;
• analysis of indicators that displays the efficiency of managing their own capital;
• analysis of indicators, which determine the cost of own and attracted funds;
• identification and analysis of indicators that characterize the process of distribution of liabilities and assets of a commercial bank, as well as management of its active operations (operations with corporate and government securities);
• analysis of factors that have a direct impact on the Bank's activities and its financial condition;
• execution of calculations that are associated with the definition of the profitability of financial instruments (both at the planning stage and in the process of conducting current activities).

In the process of calculating analytical indicators, quarterly and annual income and expenses are applied, and the averaged balance sheet indicators are calculated.

Financial Analysis of the Bank's profit and loss report

The report on profit and loss to the commercial bank reflects all its income, expenses and that profit, which remained at the disposal of owners from doing business.

The business of any commercial bank is that it attracts funds for a percentage of the population, enterprises and other banking counterparties, after which the resources attracted as loans and loans under a higher interest rate. The difference between interest rates covers the payment of wages to employees, rental of premises and pay other expenses.

Definition 2.

Accordingly, the main income of the commercial bank is payments, paying for a percentage of the use of a loan and a loan from individuals and enterprises. And the main expenses of the bank are payments on deposit deposits.

In addition, in banks there are proceeds from the management of related activities: profits from the settlement and cash service of enterprises, the provision of paid services to individuals. Most commercial banks are participants in the securities market, thereby earning the investment. Bank expenses In addition to paying interest on deposits include: utility payments, advertising of products and services, tax pay and so on.

A report on financial analysis in a commercial bank contains the following sources of income:

1. Placing funds in credit institutions - receiving interest on loans issued to other counterparties.
2. Loans granted to customers who are not credit organizations. This includes interest on loans that were issued to individuals and enterprises. Often this indicator is the main yield of the bank. However, there are such banks that have a total profitability of returns from investment in securities and participation in the interbank market.
3. Provision of financial lease services. This source of income is formed from obtaining interest on leasing operations. Leasing is a complex multifaceted transaction in which the company does not receive a cash loan, but equipment or transport that it is necessary for doing effectively. The supplier of equipment or equipment is calculated by a leasing bank, and the enterprise pays interest in a certain period, gradually returning leasing debt.
4. Investing in securities - interest received from purchased bonds of enterprises or other commercial banks.
5. Commission income are a major profit. This includes income from cash service, foreign currency transactions, the maintenance of plastic cards, as well as the provision of bank guarantees.

With regard to expenses, which are also part of the Bank's financial analysis, these include the following:

1. Interest expenses for attracted loan funds. This includes loans fees that are taken in other commercial banks. Since there are always organizations that are engaged in active lending to the population, there are always banks that resort to data to the manipulation. In order for the funds raised simply, the banks actively lend each other for a period of time from one working day.
2. Interest expenses on the funds raised by the funds of those customers who are not credit organizations. This includes those percentages that they are paid on deposit transactions of individuals and legal entities.
3. Interest expenses on issued debt obligations. This is a payment of interest on issued bonds of a commercial bank.

Note 2.

Conducting a financial analysis of the bank, all incomes and deduct expenses should be folded. The result is a profit before tax. And only after tax deduction, net income for the reporting period is obtained.

Analysis of the balance of commercial bank

The balance of the commercial bank contains assets and liabilities. Assets can be divided into revolutions and non-current, but they are all together in order of decrease in liquidity - first they are funded, and in the completion of long-term assets.

Assets in any banking structure is what allows you to earn money. Most banks are issued loans. After that, a special place is paid to the acquired securities.

In the financial analysis of the bank, three articles are given to the balance of securities.

Financial assets It is estimated at a real value through a loss or profit - this is a short-term securities portfolio that are intended for sale in the near future (stocks and bonds, options, futures). They are estimated on the basis of market value.

Clean investments in securities and financial assets - These are the securities that are purchased for a long time with the purpose of resale.

Clean investments in securitieswhich are held before the repayment - in this case, investments are reflected in bills and bonds, which were bought in order to receive income from their repayment.

In this article, I will stay in more detail on some criteria for assessing the reliability of banks. It will be about bank standards and other important financial indicators.

The reliability of the Bank is largely determined by its financial stability. Financial stability is the ability of the Bank to resist external and internal negative factors affecting its financial position.

In order to make it easier to determine the reliability and financial stability of the Bank, there are bank standards.

Bank standards

Standards were developed by the Central Bank of Russia and are mandatory to comply with all banks. Bank standards are calculated on the basis of monthly financial statements of banks and the Central Bank is constantly monitored. If violations of the Central Bank standards may impose restrictions on the Bank's activities and carrying out banking operations, for example, to prohibit the deposits of individuals, impose fines, introduce a temporary administration and eventually withdraw the license.

There are 9 required banking standards. The formulas for their calculation can be found in the instructions on the website of the Central Bank of the Russian Federation.

• H1. Reliability of equity of equity (minimum 10%)
• H2. Instant liquidity standard (minimum 15%)
• H3. Regulatory of current liquidity (minimum 50%)
• H4. Long-term liquidity ratio (maximum 120%)
• H6 The value of the maximum risk size per borrower or a group of connected borrowers (maximum 25%)
• H7 The value of the maximum size of large credit risks (maximum 800%)
• H9.1 Regulatory of the maximum amount of loans, bank guarantees and guarantees provided by the Bank to its participants (shareholders) (maximum 50%)
• H10.1. Standard of the cumulative risk of risk on bank insiders (maximum 35%)
• H12. Regulation of the use of own funds (capital) of the Bank to acquire shares (shares) of other legal entities (maximum 25%)

The first four standards - capital adequacy and liquidity are basic.

Capital adequacy ratio H1.0

The Bank receives the main income from interest. The bank attracts borrowed capital in the form of deposits and issues loans or invests in securities. For example, the Bank attracts deposits of 10%, and loans give out 20%. At the difference in interest between attracted deposits and issued loans, the bank earns profits. Moreover, the amount of borrowed capital significantly exceeds its own capital. If the bank's income decreases greatly, for example, borrowers will cease to pay interest on loans, the bank can get a loss. The easiest way to compensate losses is to cover them from your own capital.

The bank's capital adequacy ratio is the relationship between own capital and assets adjusted to the ratio depending on the degree of risk (loans issued, investment in securities, other investments have different risks). It shows the ability of the Bank to reimburse financial losses from equity. The larger the importance of this standard, the greater the bank's own funds in total assets, the greater the financial stability of the bank. The minimum capital adequacy value established by the Central Bank is 10%. If capital adequacy ratio is less than 2%, the Central Bank is obliged to withdraw a license from the bank.

Liquidity standards

Liquidity standards show the readiness of the Bank to fulfill their obligations. Deposits and customer funds on current accounts are obligations for the Bank. Depositors may require them at any time, and the bank must be ready to issue funds to its depositors. Bank assets (money, loans, securities) differ in liquidity. The most liquid - money at the checkout, ATMs and the bank's accounts. These funds the bank can give and translate to another account at any time. But the bank does not store all its assets in the form of money, most bank assets are loans or securities. In case the current funds end, the Bank may soon sell its securities and translate them into money to fulfill its obligations. However, the lion's share of bank assets is loans. With loans much more complicated, some loans the bank gives for many years and cannot return them at one point. Therefore, the bank must comply with the balance between highly liquid and low-liquid assets to be able to fulfill its obligations on time and at the same time earn profit. You can appreciate the ability of the Bank to fulfill its obligations using liquidity standards.

There are 3 liquidity standards depending on the period: Instant, current and long-term.

N2 instant liquidity standard Shows the risk of the loss of solvency of the bank for one day. This is the ratio of high-liquid assets of the bank, which the bank can be implemented during the day, to the amount of obligations that the bank must fulfill or can refer over one day. Such obligations include amounts on current and settlement accounts, demand accounts, one-day interbank loans. The amount of these obligations is corrected by the magnitude of the minimum mandatory balance of funds in the accounts. The minimum value of the standard is 15%.

N3 current liquidity standard shows the risk of loss of the Bank's solvency over the next 30 days. This is the ratio of the amount of liquid assets of the bank to the amount of the obligations of the Bank, which are required to fulfill the Bank or which may require the Bank to fulfill within 30 days. The minimum value of the standard is 50%.

N4 long-term liquidity standard Shows the risk of loss of bank solvency as a result of placing funds in long-term assets. This is the ratio of long-term loans issued by the Bank, with the maturity of more than a year to the Bank's own capital and the obligations of the Bank, with the maturity of more than a year. The maximum value of the standard is 120%.

Financial indicators of the bank

Profitability of assets and capital

The profitability of assets and equity shows the effectiveness of the Bank's work. Profitability is the ratio of profit to assets (ROA) or to own capital (ROE). The more profitability, the more efficient the bank uses its or borrowed capital to profit. If the profitability of capital has decreased during the year, it may mean that the bank began to experience some problems.

Credit for credit

Not all bank borrowers return loans in time. Always some part of loans are overdue. Especially strong, the share of delay may increase in the crisis. If the client does not return a loan, then the bank does not receive a profit. At the same time, the bank is obliged to reserve part of its funds on loans. The larger the share of delay in loans, the greater the risk of the bank. Exchange more than 10% is large.

Net percentage margin - This is the difference between interest income and interest expenses divided by the amount of interest (income) assets of the bank. Indicates which net income in percentage bring its assets to the bank.

Yield of assets - The ratio of interest income to interest income assets. Indicates which profitability of the Bank's interest assets are bringing - loans and securities.

Cost of liabilities - The ratio of interest expenses to the magnitude of interest obligations. Shows to what extent the bank is accounted for borrowed capital - deposits and loans taken from other banks.

Bank financial indicators and bank standards should be considered in dynamics. So you can see certain trends. We list the negative factors for which you need to pay attention to:

• capital adequacy ratio is close to the minimum level of 10%
• liquidity indicators are close to minimum values
• reducing the profitability of assets
• increased delay in loans
• reducing the yield of assets
• increase the cost of liabilities
• clean interest margin
• a strong decline in the share of deposits of individuals in liabilities - means that depositors take money from the bank

Where to watch bank standards and other financial indicators of the bank?

Bank standards and financial indicators of the Bank are calculated on the basis of financial statements that the Bank is obliged to disclose every month. Reporting and regulations are published on the website of the Central Bank of the Russian Federation in the section "Information on Credit Organizations". But it is much more convenient to analyze the bank's indicators on specialized sites Kuap.ru and Analizbankov.ru.

For example, take the bank the trust. In December 2014, a decision was made to Sanation by the Bank of Trust. The bank trust faced a lack of liquidity and did not cope with the bud of depositors during banking panic. Later, the Central Bank found a "hole" in its capital in size of several billion rubles.

On the website Kuap.ru for each bank there is a section "Financial Analysis (F.135)". This section publishes financial performance and banking standards. Section "Key Indicators" shows the dynamics of various financial indicators: profitability, yield of assets, the cost of liabilities, etc. In chapter "Financial position" The main bank standards are shown - capital adequacy and liquidity. At the bottom, a mini-outcome and a list of violations of bank standards are published. The Bank of Trust often violated the standard of adequacy of the basic capital of H1.1, and capital adequacy is close to a critical level of 10%.

Bank recommendations Trust:
Evaluation of the reliability of the bank Trust is unsatisfactory.

• capital adequacy H.1
• liquidity standards
• the magnitude of the capital, profits and deposits of individuals
• the share of deposits of individuals and legal entities
• other

Even good bank standards and financial indicators cannot fully guarantee the reliability of the bank. Financial statements can be falsified, much depends on the reputation of the bank and its owners, as well as the behavior of the depositors. An avalanche-shaped stream of customers who take their money can fill any, even the most reliable bank. Therefore, by making a decision, also appreciate others.

Good day to you, dear visitor.

Using table data, you can perform a basic financial analysis of a commercial bank. To do this, transfer the data from the financial reporting in the calculated tables, then click the "Update" button and the indicators will be calculated automatically.

Please note: Starting from 2016, bank reporting has changed. The new version of the service analysis of the financial condition and the results of the bank's activities is here :.

1. Enter the source data of the bank's balance sheet and the financial results report in light blue cells, replacing the dimensions of the example.
2. Then scroll down the page, click the Update button - all data will be recalculated. They will only remain highlight, copy and move to your document.

On this page you can perform the basic analysis of the financial and property status of the Bank and its financial results:

1. Horizontal analysis of the dynamics of assets
2. Vertical Analysis of Asset Structure
3. Horizontal analysis of liabilities dynamics
4. Vertical analysis of the structure of liabilities
5. Horizontal analysis of the dynamics of sources of own funds
6. Vertical analysis of the structure of sources of own funds
7. Horizontal analysis of the dynamics of off-balance sheet commitments
8. Vertical analysis of the structure of off-balance sheet commitments
9. Horizontal analysis of the dynamics of financial results

Analysis conclusions are built on the basis of problems identified: examples of problems detected during analysis.

Examples of events to eliminate identified problems: Examples of activities for WRC.

You can make conclusions for financial analysis yourself, or order them on any stock exchange for students.

To estimate the cost you can leave a bid on the stock exchange. If no one is suitable - just delete the application and that's it.

Sincerely, Alexander Krylov. Contact me you can with vk.com/aldex.

Before entering the data, please read this article:

If the table does not fit, open it in a new window: analysis of the financial condition and results of the Bank's work

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