An analysis of bank profitability

An important component of the mechanism of the bank are profit management systems and methods for its analysis. Profit analysis is the process of investigation of the conditions and results of its formation and use of reserves in order to identify further efficiency management. The purpose of the analysis of profit and profitability is to increase the absolute value of profits and profitability of the bank based on the effective management of revenue and expenditure. Thus, analysis of profit and profitability based on an analysis of revenues and expenses of the bank. An important tool for analyzing the dynamics of the income and expense - an analysis of changes pofaktornogo for each item of income and expenses. The main methods used to calculate the impact, there are methods of chain permutations, absolute and relative differences. The main items of income and expense Interest component is determined, so the model of factor analysis is the most developed and shirokoupotreblyaemymi. Technique of factor analysis of interest income and interest expense are reduced. In addition to models of factor analysis of interest income and expense, there are other developments allowing to assess the impact of certain factors on changes in the effective rate. The basic models are presented. For an overall assessment of the bank for the period analyzed, by comparison of the income and expenses. The presence of mirror articles in income and expenditure items in the profit and loss account allows you to compare them with each other and to draw conclusions about the effectiveness of a particular financial instrument in different sectors of the banking market. Category: Fundamentals of Financial Management Bank