Operational management of the portfolio securities of the bank

The formation of the securities portfolio after its completion gives the operational portfolio management. Under the operational control of the securities portfolio to understand the rationale and implementation of management decisions that ensure the maintenance task oriented investment portfolio formed by the parameters of its profitability, and liquidity risk. This is because the goals of the investor may change over time, resulting in the current portfolio is no longer effective. It is likely that the investor will have to build a new portfolio, selling a specific portion of the securities and buying new securities. In the operative management of portfolio financial manager must answer the following questions: Is there a need for changes in the structure of the portfolio due to changes in the status of the issuer, the investor or the general economic climate is sufficiently diversified portfolio, remain valid reasons for these or other securities were elected in the past. The process of operational management portfolio consists of the following steps: 1. The organization continuously monitor the conditions for economic development and market the securities on its individual segments. Such monitoring should be continuous for a considerable variability in the financial markets, including the securities market. The monitoring should focus on identifying those factors that lead to a lower level of profitability, liquidity and increase the risk of the securities comprising the portfolio of the bank. The factors affecting the investment attractiveness of the share of securities, include: reduction in dividend payments to reduce the capital gains of the issuer; slowdown in net assets of the issuer or a decrease in their amount; conjunctural downturn in the industry, which employs the issuer, the total decline in the securities market, a significant excess of the market price of the security compared to its real value at time of purchase the investor; speculation securities market participants, increased taxation of income from mutual funds, securities. Category: Management Operations Commercial Bank | Tags: asset management