Lesson 8 Financial Analysis of Banks LESSON OUTLINE LEARNING OBJECTIVES – Principles of Lending
Banks accept deposits from their depositors which form the main source of funds for banks. Banks also raise funds in the domestic financial markets and international financial markets. These funds are deployed by banks as loans and advances and also as investments. Hence, the banker at the time of deploying his funds either as a lending banker or investing banker needs to be careful. Like any other lender and / or as an investor, a banker also needs to carry out many a type of analysis.
– Types of Analysis – Financial Analysis – Du Pont Model – Bankers as Lender – Bankers as Investor – Lesson Round Up
After reading this chapter the reader would be able to:
– Self Test Questions
– Understand the types of financial statements and their role in financial analysis – Appreciate the various aspects of financial analysis and their significance – Know why financial analysis is an important tool for lending and investing bankers
