The risk in banking operations

Using this index will take into account the risks in banking operations, evaluating the effectiveness of managers according to effectiveness of risk management, implement good governance balance (growth of the balance sheet must be accompanied by a corresponding increase in bank profits). Due to the introduction of the indicator SVA can accommodate the interests of both shareholders as well as bank managers, efficient use of capital and direct it primarily where there is high return and an acceptable level of risk. This figure also serves as a database for establishing reasonable prices for credit services, which are included in the adequate risk premium, to make decisions on granting loans to small volume, which significantly reduces the risk of individual credit transactions. This indicator allows you to control the cost of the bank, because the higher credit quality and portfolio, the higher its market value, as well as to define a single criterion for all parts of their work (a common language of financial communication). The second group of indicators - revenue per employee, profitability, capital, return on assets, the cost per employee, the ratio of operating income and operating expenses, etc. "Market and customer" perspective aims? To determine the competitive position of the bank and key customers to ensure receipt of an acceptable level of profitability in its current and future periods. Category: Controlling Analysis