Topic 8

Financial Institutions

MFK FIN536 Topic 8 1

 At the end of the lessons, students should be able to:-
 Identify the sources and uses of funds and structure of
financial statements of banking institutions.

 To understand the risk of financial institutions.

 Identify the various products offered by commercial banks.

MFK FIN536 Topic 8 2

Sources & Uses of funds and
structure of financial
statements of banking
institutions

MFK FIN536 Topic 8 3

MFK FIN536 Topic 8 4
MFK FIN536 Topic 8 5
MFK FIN536 Topic 8 6
Risk of financial institutions

MFK FIN536 Topic 8 7

MFK FIN536 Topic 8 8
 Risk of non payment of borrowing/financing
provided to a borrower on maturity date.

MFK FIN536 Topic 8 9

 Type 1
 Risk of not being able to convert assets into cash as
and when the needs arises without reducing its value
substantially.

 Type 2
 Risk of not being able to have an access to funds in
the market to meet requirements.

MFK FIN536 Topic 8 10

 Risk of volatility in the interest rates affecting an
institutions' income.

MFK FIN536 Topic 8 11

 Risk of inefficiency in the operation leading to
affecting an institution’s income.

MFK FIN536 Topic 8 12

 Products offered
(Commercial banks)

MFK FIN536 Topic 8 13

Deposits Saving Current Fixed Deposit / GIA NICD FRIA
Loan/ Block discounting Contract JV Share loan
Financing financing

Bridging loan Education loan Property loan Shop house

loan

Property loan Equipment loan Leasing Sundry loan

Overdraft facility Floor stocking Personal loan Syndicated

loan

Club membership HP agency Plant & machinery Term loan

loan

Computer loan Hire purchase Project financing Tour

financing

Factoring facility Home loan Property loan Unit trust

loan

Fixed asset loan Industrial HP RC facility Working

MFK FIN536 Topic 8
capital loan
14
Trade Letter of credit Export credit refinancing
Finance
Trust receipt Shipping guarantee

Banker’s Acceptance Bank guarantee

Cards Debit card

services
Credit card

Money BNM Bills Negotiable debt certificate

markets
Commercial papers
Interbank borrowing
MGS REPO

Banks Conventional

Islamic
MFK FIN536 Topic 8 15
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 Features.

MFK FIN536 Topic 8 17

MFK FIN536 Topic 8 18
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MFK FIN536 Topic 8 20
 Reflection 1

 Reflection 2

 Reflection 3

 Reflection 4

MFK FIN536 Topic 8 21

At the end of the lessons, students should be able to:-
 Identify the sources and uses of funds and structure
of financial statements of banking institutions.

 To understand the risk of financial institutions.

 Identify the various products offered by commercial

banks.

MFK FIN536 Topic 8 22

 Read on banking regulation and
management.

MFK FIN536 Topic 8 23

THANK
YOU…

MFK FIN536 Topic 8 24