商业银行管理Chap006.pptVIP

* * * * * * * Chapter Six Measuring and Evaluating the Performance of Banks and Their Principal Competitors Key Topics Stock Values and Profitability Ratios Measuring Credit, Liquidity, and Other Risks Measuring Operating Efficiency Performance of Competing Financial Firms Size and Location Effects Appendix: Using Financial Ratios and Other Analytical Tools to Track Financial Firm Performance – The UBPR and BHCPR Introduction This chapter focuses on the most widely used indicators of the quality and quantity of bank performance and their principal competitors Focus on the most important dimensions of performance – profitability and risk Financial institutions are simply businesses organized to maximize the value of the shareholders’ wealth invested in the firm at an acceptable level of risk Must continually be on the lookout for new opportunities for revenue growth, greater efficiency, and more effective planning and control Evaluating Performance Performance must be directed toward specific objectives A fair evaluation of any financial firm’s performance should start by evaluating whether it has been able to achieve the objectives its management and stockholders have chosen A key objective is to maximize the value of the firm Evaluating Performance (continued) The minimum acceptable rate of return, r, is sometimes referred to as an institution’s cost of capital Two main components The risk-free rate of interest The equity risk premium The value of the financial firm’s stock will tend to rise in any of the following situations The value of the stream of future stockholder dividends is expected to increase The financial organization’s perceived level of risk falls Market interest rates decrease, reducing shareholders’ acceptable rates of return via the risk-free rate of interest component of all market interest rates Expected dividend increases are combined with declining risk, as perceived by investors Evaluating Performance (continued) The stock values of