Problems on Bank Funds

1. Given below is information from financial statement of SAP Bank:

Rs cr Rs
cr

Paid up capital 1000 Total interest paid 956

Statutory Reserves 1200 Interest paid on borrowings 60

Deposits Loans and Advances 20460

Current Deposits 5500 (5190) Investments 1650

Savings Deposits 8650 (8010)

Time Deposits 9560 (9060)

Borrowings 1200 (1050)

Note: Figures in brackets give previous year’s figures.

From above information, compute-

(i) Percentage of CASA Deposits

(ii) CD ratio in percentage terms
(iii) Cost of Deposits
(iv) Cost of Borrowings
Answer
1. CASA deposits = Savings + Current Deposits
= 8650 + 5500 = 14150

Total deposits = Savings + current + Term deposit

= 8650 + 5500 + 9560 = 23710
% of CASA deposits = 14150 * 100/ 23710 = 59.67 %
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2. CD ratio = Credit*100 / Deposit
= 20460 *100 / 23710 = 86.29 %
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3. Cost of Deposit = Intt paid on Deposit *100/ avg Deposit
= Intt paid on Deposit *100 / (Total Deposit at beginning + deposit
at end of year)/2
Avg Deposit = [(5190 +8010 + 9060) + 23710 ] /2= (22260 + 23710) /2
= 45970 /2 = 22985
Intt paid on deposit = total intt paid – Intt on borrowing = 956-60
= 896
Cost of deposit = 896 *100 / 22985 = 3.89 %
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4. Cost of borrowing = Intt paid on borrowing *100/ Avg
borrowing
Avg borrowing = [Borrowing at beginning +borrowing at end ] /2
( 1200 +1050) /2 = 2250/2 = 1125
Cost of borrowing = 60*100 /1125 = 5.33 %
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2. Given below is information from financial statement of Name Bank:

Rs cr Rs cr

Paid up capital 1300 Total interest paid 790

Statutory Reserves 1100 Interest paid on borrowings 90

Deposits Loans and Advances 18460

Current Deposits 5700 (5100) Investments 1650

Savings Deposits 8000 (8210)

Time Deposits 9440 (8960)

Borrowings 1500 (1350)

Note: Figures in brackets give previous year’s figures.

From above information, compute-

1. Percentage of CASA Deposits

2. CD ratio in percentage terms
3. Cost of Deposits
4. Cost of Borrowings