制卧台贸易上兰 银行管理学 rate risk,foreign exchange risk and price risk.Each type of risk refers to the potential variation in a bank's net income or market value of stockholders'equity resulting from problems that affect that part of the bank's activities. 3.Banks also face risks in the areas of country risk associated with loans or other activity with foreign government units and off-balance sheet activities,which create contingent liabilities.More recently,banks have focused on reputation risk.For example,in 2002 Citigroup found that even though it continued to report strong profits,the firm experienced strong criticism for 1)its role in facilitating strategies to disguise Enron's true financial status,2)problems in its sub-prime lending programs via the Associates and its own internal finance company activities,and 3)problems with its Salomon Smith Barney subsidiary with analyst conflicts between stock reports and the firm's investment banking relationships.For much of 2002,Citigroup's stock price reflected the continued barrage of reputation problems more than the firm's reported earnings. 4.A bank's return on equity(ROE)can be decomposed in terms of the duPont system of financial ratio analysis.This examination of historical balance sheet and income statement data enables an analyst to evaluate the comparative strengths and weaknesses of performance over time and versus peer banks.The Uniform Bank Performance Report (UBPR)data reflect the basic ratios from this return on equity model. 5. Different-sized commercial banks exhibit different operating characteristics and thus performance measures.Small banks typically report a higher return on assets(ROA)than large banks because they earn higher gross yields on assets and pay less interest on liabilities. 6.High performance banks generally benefit from lower interest and non-interest expense and limit credit risk so that loan losses are relatively low.They also operate with above average stockholders'equity. 7.Many banks can successfully "window-dress"performance by manipulating the reporting of financial data.They may accelerate revenue recognition and defer expenses or selectively alter when they take securities gains or losses and time when to charge off loans or report loans as non-performing.As such,they may inappropriately smooth earnings with provisions for loan losses or by other means.Analysts must be careful when evaluating extraordinary transactions that have one-time gain or loss features. Teaching Suggestions 1.It is extremely important that students fully understand the material in this chapter before attempting more difficult analysis.The text introduces actual balance sheet and income statement data for PNC Bank,the principal subsidiary of PNC Bank Corp.,and data for a hypothetical community bank that is representative of the typical independent bank.You should take a substantial amount of time to describe the basic balance sheet items. emphasizing the dominant holdings of loans,securities,and cash/cash equivalents among assets,and the role of core deposits versus noncore or purchased(hot money)liabilities. Demonstrate how the income statement is structured to emphasize the financial nature of banks by focusing on net interest income and the comparison on noninterest income and noninterest expense.Contrast this with the income statement of a nonfinancial 第4页共29页银行管理学 第 4 页 共 29 页 rate risk, foreign exchange risk and price risk. Each type of risk refers to the potential variation in a bank's net income or market value of stockholders’ equity resulting from problems that affect that part of the bank's activities. 3. Banks also face risks in the areas of country risk associated with loans or other activity with foreign government units and off-balance sheet activities, which create contingent liabilities. More recently, banks have focused on reputation risk. For example, in 2002 Citigroup found that even though it continued to report strong profits, the firm experienced strong criticism for 1) its role in facilitating strategies to disguise Enron’s true financial status, 2) problems in its sub-prime lending programs via the Associates and its own internal finance company activities, and 3) problems with its Salomon Smith Barney subsidiary with analyst conflicts between stock reports and the firm’s investment banking relationships. For much of 2002, Citigroup’s stock price reflected the continued barrage of reputation problems more than the firm’s reported earnings. 4. A bank's return on equity (ROE) can be decomposed in terms of the duPont system of financial ratio analysis. This examination of historical balance sheet and income statement data enables an analyst to evaluate the comparative strengths and weaknesses of performance over time and versus peer banks. The Uniform Bank Performance Report (UBPR) data reflect the basic ratios from this return on equity model. 5. Different-sized commercial banks exhibit different operating characteristics and thus performance measures. Small banks typically report a higher return on assets (ROA) than large banks because they earn higher gross yields on assets and pay less interest on liabilities. 6. High performance banks generally benefit from lower interest and non-interest expense and limit credit risk so that loan losses are relatively low. They also operate with above average stockholders' equity. 7. Many banks can successfully "window-dress" performance by manipulating the reporting of financial data. They may accelerate revenue recognition and defer expenses or selectively alter when they take securities gains or losses and time when to charge off loans or report loans as non-performing. As such, they may inappropriately smooth earnings with provisions for loan losses or by other means. Analysts must be careful when evaluating extraordinary transactions that have one-time gain or loss features. Teaching Suggestions 1. It is extremely important that students fully understand the material in this chapter before attempting more difficult analysis. The text introduces actual balance sheet and income statement data for PNC Bank, the principal subsidiary of PNC Bank Corp., and data for a hypothetical community bank that is representative of the typical independent bank. You should take a substantial amount of time to describe the basic balance sheet items, emphasizing the dominant holdings of loans, securities, and cash/cash equivalents among assets, and the role of core deposits versus noncore or purchased (hot money) liabilities. Demonstrate how the income statement is structured to emphasize the financial nature of banks by focusing on net interest income and the comparison on noninterest income and noninterest expense. Contrast this with the income statement of a nonfinancial