To assess the Asset Quality of Banks/Financial Institutions, the following ratios need to be analyzed:

Loans Loss
Non-performing loans to total loans
Loan Recoveries ratio
Loan Loss Reserves
EARNINGS COVERAGE
Capital Adequacy

Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves

Ratio
Purpose
Formula

Earnings Coverage Ratio

Measures the level of earnings and the charge to income […]

To assess the Asset Quality, the following ratios need to be analyzed:

Loans Loss
Non-performing loans to total loans
Loan Recoveries ratio
LOAN LOSS RESERVES
Earnings coverage
Capital Adequacy

Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves

ADEQUACY OF LOAN LOSS RESERVE […]

To assess the Asset Quality of Banks/Financial Institutions, the following ratios need to be analyzed:

Loans Loss
NON-PERFORMING LOANS TO TOTAL LOANS
Loans Recoveries Rate
Loans Loss Reserve
Earnings coverage
Capital Adequacy

Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves

NON-PERFORMING LOANS TO TOTAL LOANS

Ratio

Measure
Formula

Non Performing Loans To Total Loans
· […]

To assess the Asset Quality of Banks/Financial Institutions, the following ratios need to be analyzed:

LOANS LOSS
Non-performing loans to Total Loans
Loans Recoveries Ratio
Loans Loss Reserves
Earnings coverage
Capital Adequacy

Capital Formation Ratio

Capital to Assets Growth

Gross Capital to Average Assets plus Reserves

LOANS LOSS:

Poor asset quality is reflected in the loans written off or loans loss ratio, […]

One of the fundamental reasons for a bank/financial institution to collapse is its poor asset quality namely giving out bad or poor credit standard loans Not even foreign exchange exposure, deposits, maturity mismatches and open positions can hit it so hard to cause a bank/financial institution to collapse ! When a bank/financial institution get […]