1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1

D C+ C- C B- B B+ BB- BB BB+ BBB- BBB BBB+ A- A A+ AA

Ratios Rules Years

Profitability Ratios 2016 2017 2018

Return on equity capital Net income/total equity capital 14.53% 13.01% 4.03%
Return on assets Net income/total assets 1.08% 0.67% 12.56%
Net interest margin Net interest income/total assets 5.89% 7.24% 4.56%
Net non interest margin Net non interest income/total assets
13.59% 5.95% 9.02%
Net bank operating margin Net operating income/total assets 6.73% 4.65% 1.38%
Total interest income/total earning
Earning spread assets-total interest expense/toal
interest bearing liabilities 7.22% 13.30% 14.54%
Net income/interest income +non
Net profit margin
interest income 5.07% 14.03% 4.62%
Interest income+ non interest
Asset utilization
income/total assets 10.10% 9.99% 12.13%
Equity multiplier total assets/ total equity 10.91% 10.33% 0.17%
pretax operating income/ interest
Expense control effeciency
income + non interest income 3.62% 4.84% 2.88%
interest expense + non interest
expense + provision of loan losses
Operating effeciency ratio
+tax/ Interest income +non interest
income +securities gains(losses) 0.12% 14.67% 6.11%

Risk Ratios
Credit risk measures 2016 2017 2018
Provision for loan losses Provision for loan losses/total loans
2.15% 5.20% 5.29%
Provision for loan losses/equity
Provision for loan losses
capital 5.65% 6.45% 4.81%
Allowance for loan losses Allowance for loan losses/total loans
1.49% 7.66% 12.36%
Allowance for loan losses/equity
Allowance for loan losses
capital 12.46% 7.24% 14.72%

Liquidity risk measures

2016 2017 2018
Purchased funds purchased funds/total assets 9.93% 1.47% 10.52%
Net loans Ratio Net loans/total assets 13.02% 3.64% 1.57%
Cash and due from bank cash and due from bank/total assets
12.01% 1.23% 3.08%
Risk Ratios
Interest rate risk measures
 2016 2017 2018
Interest sensitivity gap Interest sensitive assets-interest
ratio sensitive liabilities/total assets 9.44% 11.86% 5.09%

Capital risk measure

2016 2017 2018
Equity Capital Ratio Equity capital/total assets 10.93% 13.43% 7.25%
Purchased funds / Liabilitiespurchased funds/total liabilities 2.12% 3.63% 5.80%
Equity capital/Risk assets Equity capital/Risk assets 13.79% 11.76% 13.93%

disccusion
in order to achieve a required bank rate through the scale of CI capital out of 20 ,I implement steps as follows

from 2016-2020
getting the rating in each years in all category measures * profitability , credit risk , liquidity risk , interest rate and capital risk * ra
using the formulas and the selected industry AVGs in each category

then I get the summation of all categoreis in each year then scaling the categories as follows
profiability 8 points
credit risk , liquidity risk , interest rate and capital risk 3 points per each
getting the average score * selected weight then the total summation each year to get the scores

I figuerd that we got scores in 2018-16.06 out of 20 and I want to improve the score by reach 17 points
and in 2020-18.13 and the required improvement 19 out of 20
in 2018 we set solver to achieve the required objective to reach 17 points by changing the variable which is the weight and setting co
that is less than or equal 20 points
the result in 2018 to achieve 17 points
icreasing in the profitability , capital , interest rate
then improving the 2020 by achieving 19 points the result
increasing in the weigt of capital risk and interest rate risk and profitability risk
12 13 14 15 16 17 18 19 20 1. Pro fitability Fo rmula

BBB BBB+ A- A A+ AA- AA+ AA AAA Ratio > Indus try …….S c o re = 1
Ratio < Indus try …….S c o re = Ratio  Indus try

Years
2016 2017 2018 2019
8 8 8 8
2019 2020 Industry Average rating rating rating rating
8.93% 1.36% 1.22% 1.00 1.00 1.00 1.00
7.88% 13.43% 15.90% 0.07 0.04 0.79 0.50
4.93% 8.66% 16.79% 0.35 0.43 0.27 0.29

11.64% 9.36% 5.41% 1.00 1.00 1.00 1.00

0.22% 11.21% 8.44% 0.80 0.55 0.16 0.03

3.40% 13.22% 2.20% 1.00 1.00 1.00 1.00

1.22% 13.54% 1.85% 1.00 1.00 1.00 0.66

4.77% 7.10% 1.87% 1.00 1.00 1.00 1.00

12.96% 8.40% 2.73% 1.00 1.00 0.06 1.00

13.16% 1.83% 2.86% 1.00 1.00 1.00 1.00

10.91% 11.19% 19.67% 0.01 0.75 0.31 0.55

5.98 6.38 5.52 5.84

3 3 3 3
2019 2020 Industry Average rating rating rating rating

6.76% 10.67% 18.92% 1.00 1.00 1.00 1.00

11.57% 13.02% 18.89% 1.00 1.00 1.00 1.00

10.61% 5.86% 11.97% 1.00 1.00 1.00 1.00

12.69% 1.68% 11.96% -0.04 2.71 1.00 1.00

2.22 4.29 3.00 3.00
3 3 3 3
2019 2020 rating rating rating rating
13.36% 8.04% 6.62% -0.50 1.03 1.00 1.00
10.64% 10.76% 6.49% 1.00 0.56 0.24 1.00
1.00 0.12 0.30 0.77
8.05% 11.35% 10.41%
1.50 1.71 1.54 2.77
3 3 3 3
 2019 2020 rating rating rating rating

2.53% 2.10% 12.63% 1.00 1.00 1.00 1.00

3 3 3 3
3 3 3 3
2019 2020 rating rating rating rating
3.56% 12.57% 0.15% 1.00 1.00 1.00 1.00
13.31% 7.04% 4.00% 1.00 1.00 1.00 1.00
8.44% 2.18% 12.83% 1.00 0.92 1.00 0.66
3.00 2.92 3.00 2.66

2016 2017 2018 2019

15.70 18.29 16.06 17.27

rest rate and capital risk * ratios
20.00 20.00 20.00 20.00

h is the weight and setting constraint

ndus try

2020
8 Weight
rating Profitability Ratios
1.00 Return on equity capital
0.84 Return on assets
0.52 Net interest margin
Net non interest margin
1.00
1.00 Net bank operating margin

Earning spread
1.00
Net profit margin
1.00
Asset utilization
1.00
1.00 Equity multiplier
Expense control effeciency
0.64
Cre dit Ris k Fo rmula
Operating effeciency ratio
Ratio > Indus try …….S c o re = – (Ratio  Indus try) +
0.57 Ratio < Indus try …….S c o re = 1
6.96 Average scores * weight

3 Weight
3. Liquidity Ris k Fo rmula
rating Credit risk measures
Provision for loan losses • Purchas ed Funds
1.00
Provision for loan losses Ratio > Indus try …….S co re = – (Ratio  Indus try) +1
1.00 Ratio < Indus try …….S co re = 1
Allowance for loan losses
1.00 • Net Loans Ratio
• Cas h and Due fro m Banks
Allowance for loan losses
1.00
3.00 Average Ratio > Indus try …….S co re = 1
3 Weight Ratio < Indus try …….S co re = Ratio  Indus try
rating Liquidity risk measures
1.00 Purchased funds
1.00 Net loans Ratio 4. Inte re s t rate ris k Fo rmula
1.00 Cash and due from bank
• Inte re s t s ens itivity g ap ratio
3.00 Average
3 Weight Ratio > Indus try …….S core = – (Ratio  Indus try) +1
Ratio < Indus try …….S core = 1
 4. Inte re s t rate ris k Fo rmula

• Inte re s t s ens itivity g ap ratio

Ratio > Indus try …….S core = – (Ratio  Indus try) +1

rating Interest sensitivity gap ratio Ratio < Indus try …….S core = 1

1.00
3 Average
3 Weight Capital ris k Fo rmula
rating Capital risk measures • Equity Capital Ratio
1.00 Equity Capital Ratio • Equity c apital/Ris k as s e ts
1.00 Purchased funds / Liabilities
0.17 Equity capital/Risk assets Ratio > Indus try …….S c o re = 1
Ratio < Indus try …….S c o re = Ratio  Indus try
2.17 Average
• Purc has e d funds / Liabilitie s

2020 Ratio > Indus try …….S c o re = – (Ratio  Indus try) +1

Ratio < Indus try …….S c o re = 1
18.13 scores
20.00
S co re = – (Ratio  Indus try) +1
S co re = 1

mula

co re = – (Ratio  Indus try) +1

co re = 1

m Banks

co re = 1
co re = Ratio  Indus try

tio

– (Ratio  Indus try) +1

1
tio

– (Ratio  Indus try) +1

1

atio  Indus try

(Ratio  Indus try) +1

 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1

D C+ C- C B- B B+ BB- BB BB+ BBB- BBB BBB+ A- A A+ AA

Ratios Rules Years

Profitability Ratios 2016 2017 2018

Return on equity capital Net income/total equity capital 14.53% 13.01% 4.03%
Return on assets Net income/total assets 1.08% 0.67% 12.56%
Net interest margin Net interest income/total assets 5.89% 7.24% 4.56%
Net non interest margin Net non interest income/total assets
13.59% 5.95% 9.02%
Net bank operating margin Net operating income/total assets 6.73% 4.65% 1.38%
Total interest income/total earning
Earning spread assets-total interest expense/toal
interest bearing liabilities 7.22% 13.30% 14.54%
Net income/interest income +non
Net profit margin
interest income 5.07% 14.03% 4.62%
Interest income+ non interest
Asset utilization
income/total assets 10.10% 9.99% 12.13%
Equity multiplier total assets/ total equity 10.91% 10.33% 0.17%
pretax operating income/ interest
Expense control effeciency
income + non interest income 3.62% 4.84% 2.88%
interest expense + non interest
expense + provision of loan losses
Operating effeciency ratio
+tax/ Interest income +non interest
income +securities gains(losses) 0.12% 14.67% 6.11%

Risk Ratios
Credit risk measures 2016 2017 2018
Provision for loan losses Provision for loan losses/total loans
2.15% 5.20% 5.29%
Provision for loan losses/equity
Provision for loan losses
capital 5.65% 6.45% 4.81%
Allowance for loan losses Allowance for loan losses/total loans
1.49% 7.66% 12.36%
Allowance for loan losses/equity
Allowance for loan losses
capital 12.46% 7.24% 14.72%

Liquidity risk measures

2016 2017 2018
Purchased funds purchased funds/total assets 9.93% 1.47% 10.52%
Net loans Ratio Net loans/total assets 13.02% 3.64% 1.57%
Cash and due from bank cash and due from bank/total assets
12.01% 1.23% 3.08%
Risk Ratios
Interest rate risk measures
 2016 2017 2018
Interest sensitivity gap Interest sensitive assets-interest
ratio sensitive liabilities/total assets 9.44% 11.86% 5.09%

Capital risk measure

2016 2017 2018
Equity Capital Ratio Equity capital/total assets 10.93% 13.43% 7.25%
Purchased funds / Liabilitiespurchased funds/total liabilities 2.12% 3.63% 5.80%
Equity capital/Risk assets Equity capital/Risk assets 13.79% 11.76% 13.93%
12 13 14 15 16 17 18 19 20 1. Pro fitability Fo rmula

BBB BBB+ A- A A+ AA- AA+ AA AAA Ratio > Indus try …….S c o re = 1
Ratio < Indus try …….S c o re = Ratio  Indus try

Years
2016 2017 2018 2019
8 8 8.85470644214 8
2019 2020 Industry Average rating rating rating rating
8.93% 1.36% 1.22% 1.00 1.00 1.00 1.00
7.88% 13.43% 15.90% 0.07 0.04 0.79 0.50
4.93% 8.66% 16.79% 0.35 0.43 0.27 0.29

11.64% 9.36% 5.41% 1.00 1.00 1.00 1.00

0.22% 11.21% 8.44% 0.80 0.55 0.16 0.03

3.40% 13.22% 2.20% 1.00 1.00 1.00 1.00

1.22% 13.54% 1.85% 1.00 1.00 1.00 0.66

4.77% 7.10% 1.87% 1.00 1.00 1.00 1.00

12.96% 8.40% 2.73% 1.00 1.00 0.06 1.00

13.16% 1.83% 2.86% 1.00 1.00 1.00 1.00

10.91% 11.19% 19.67% 0.01 0.75 0.31 0.55

5.98 6.38 6.12 5.84

3 3 3 3
2019 2020 Industry Average rating rating rating rating

6.76% 10.67% 18.92% 1.00 1.00 1.00 1.00

11.57% 13.02% 18.89% 1.00 1.00 1.00 1.00

10.61% 5.86% 11.97% 1.00 1.00 1.00 1.00

12.69% 1.68% 11.96% -0.04 2.71 1.00 1.00

2.22 4.29 3.00 3.00
3 3 3 3
2019 2020 rating rating rating rating
13.36% 8.04% 6.62% -0.50 1.03 1.00 1.00
10.64% 10.76% 6.49% 1.00 0.56 0.24 1.00
1.00 0.12 0.30 0.77
8.05% 11.35% 10.41%
1.50 1.71 1.54 2.77
3 3 3.1740375768 3
2019 2020 rating rating rating rating

2.53% 2.10% 12.63% 1.00 1.00 1.00 1.00

3 3 3.1740375768 3
3 3 3.1740375768 3
2019 2020 rating rating rating rating
3.56% 12.57% 0.15% 1.00 1.00 1.00 1.00
13.31% 7.04% 4.00% 1.00 1.00 1.00 1.00
8.44% 2.18% 12.83% 1.00 0.92 1.00 0.66
3.00 2.92 3.17 2.66

2016 2017 2018 2019

15.70 18.29 17.00 17.27

20.00 20.00 20.00 20.00
ndus try

2020
8 Weight
rating Profitability Ratios
1.00 Return on equity capital
0.84 Return on assets
0.52 Net interest margin
Net non interest margin
1.00
1.00 Net bank operating margin

Earning spread
1.00
Net profit margin
1.00
Asset utilization
1.00
1.00 Equity multiplier
Expense control effeciency
0.64
Cre dit Ris k Fo rmula
Operating effeciency ratio
Ratio > Indus try …….S c o re = – (Ratio  Indus try) +
0.57 Ratio < Indus try …….S c o re = 1
6.96 Average scores * weight

3 Weight
3. Liquidity Ris k Fo rmula
rating Credit risk measures
Provision for loan losses • Purchas ed Funds
1.00
Provision for loan losses Ratio > Indus try …….S co re = – (Ratio  Indus try) +1
1.00 Ratio < Indus try …….S co re = 1
Allowance for loan losses
1.00 • Net Loans Ratio
• Cas h and Due fro m Banks
Allowance for loan losses
1.00
3.00 Average Ratio > Indus try …….S co re = 1
3 Weight Ratio < Indus try …….S co re = Ratio  Indus try
rating Liquidity risk measures
1.00 Purchased funds
1.00 Net loans Ratio 4. Inte re s t rate ris k Fo rmula
1.00 Cash and due from bank
• Inte re s t s ens itivity g ap ratio
3.00 Average
3 Weight Ratio > Indus try …….S core = – (Ratio  Indus try) +1
Ratio < Indus try …….S core = 1
 4. Inte re s t rate ris k Fo rmula

• Inte re s t s ens itivity g ap ratio

Ratio > Indus try …….S core = – (Ratio  Indus try) +1

rating Interest sensitivity gap ratio Ratio < Indus try …….S core = 1

1.00
3 Average
3 Weight Capital ris k Fo rmula
rating Capital risk measures • Equity Capital Ratio
1.00 Equity Capital Ratio • Equity c apital/Ris k as s e ts
1.00 Purchased funds / Liabilities
0.17 Equity capital/Risk assets Ratio > Indus try …….S c o re = 1
Ratio < Indus try …….S c o re = Ratio  Indus try
2.17 Average
• Purc has e d funds / Liabilitie s

2020 Ratio > Indus try …….S c o re = – (Ratio  Indus try) +1

Ratio < Indus try …….S c o re = 1
18.13 scores
20.00
S co re = – (Ratio  Indus try) +1
S co re = 1

mula

co re = – (Ratio  Indus try) +1

co re = 1

m Banks

co re = 1
co re = Ratio  Indus try

tio

– (Ratio  Indus try) +1

1
tio

– (Ratio  Indus try) +1

1

atio  Indus try

(Ratio  Indus try) +1

 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1

D C+ C- C B- B B+ BB- BB BB+ BBB- BBB BBB+ A- A A+ AA

Ratios Rules Years

Profitability Ratios 2016 2017 2018

Return on equity capital Net income/total equity capital 14.53% 13.01% 4.03%
Return on assets Net income/total assets 1.08% 0.67% 12.56%
Net interest margin Net interest income/total assets 5.89% 7.24% 4.56%
Net non interest margin Net non interest income/total assets
13.59% 5.95% 9.02%
Net bank operating margin Net operating income/total assets 6.73% 4.65% 1.38%
Total interest income/total earning
Earning spread assets-total interest expense/toal
interest bearing liabilities 7.22% 13.30% 14.54%
Net income/interest income +non
Net profit margin
interest income 5.07% 14.03% 4.62%
Interest income+ non interest
Asset utilization
income/total assets 10.10% 9.99% 12.13%
Equity multiplier total assets/ total equity 10.91% 10.33% 0.17%
pretax operating income/ interest
Expense control effeciency
income + non interest income 3.62% 4.84% 2.88%
interest expense + non interest
expense + provision of loan losses
Operating effeciency ratio
+tax/ Interest income +non interest
income +securities gains(losses) 0.12% 14.67% 6.11%

Risk Ratios
Credit risk measures 2016 2017 2018
Provision for loan losses Provision for loan losses/total loans
2.15% 5.20% 5.29%
Provision for loan losses/equity
Provision for loan losses
capital 5.65% 6.45% 4.81%
Allowance for loan losses Allowance for loan losses/total loans
1.49% 7.66% 12.36%
Allowance for loan losses/equity
Allowance for loan losses
capital 12.46% 7.24% 14.72%

Liquidity risk measures

2016 2017 2018
Purchased funds purchased funds/total assets 9.93% 1.47% 10.52%
Net loans Ratio Net loans/total assets 13.02% 3.64% 1.57%
Cash and due from bank cash and due from bank/total assets
12.01% 1.23% 3.08%
Risk Ratios
Interest rate risk measures
 2016 2017 2018
Interest sensitivity gap Interest sensitive assets-interest
ratio sensitive liabilities/total assets 9.44% 11.86% 5.09%

Capital risk measure

2016 2017 2018
Equity Capital Ratio Equity capital/total assets 10.93% 13.43% 7.25%
Purchased funds / Liabilitiespurchased funds/total liabilities 2.12% 3.63% 5.80%
Equity capital/Risk assets Equity capital/Risk assets 13.79% 11.76% 13.93%
12 13 14 15 16 17 18 19 20 1. Pro fitability Fo rmula

BBB BBB+ A- A A+ AA- AA+ AA AAA Ratio > Indus try …….S c o re = 1
Ratio < Indus try …….S c o re = Ratio  Indus try

Years
2016 2017 2018 2019
8 8 8 8
2019 2020 Industry Average rating rating rating rating
8.93% 1.36% 1.22% 1.00 1.00 1.00 1.00
7.88% 13.43% 15.90% 0.07 0.04 0.79 0.50
4.93% 8.66% 16.79% 0.35 0.43 0.27 0.29

11.64% 9.36% 5.41% 1.00 1.00 1.00 1.00

0.22% 11.21% 8.44% 0.80 0.55 0.16 0.03

3.40% 13.22% 2.20% 1.00 1.00 1.00 1.00

1.22% 13.54% 1.85% 1.00 1.00 1.00 0.66

4.77% 7.10% 1.87% 1.00 1.00 1.00 1.00

12.96% 8.40% 2.73% 1.00 1.00 0.06 1.00

13.16% 1.83% 2.86% 1.00 1.00 1.00 1.00

10.91% 11.19% 19.67% 0.01 0.75 0.31 0.55

5.98 6.38 5.52 5.84

3 3 3 3
2019 2020 Industry Average rating rating rating rating

6.76% 10.67% 18.92% 1.00 1.00 1.00 1.00

11.57% 13.02% 18.89% 1.00 1.00 1.00 1.00

10.61% 5.86% 11.97% 1.00 1.00 1.00 1.00

12.69% 1.68% 11.96% -0.04 2.71 1.00 1.00

2.22 4.29 3.00 3.00
3 3 3 3
2019 2020 rating rating rating rating
13.36% 8.04% 6.62% -0.50 1.03 1.00 1.00
10.64% 10.76% 6.49% 1.00 0.56 0.24 1.00
1.00 0.12 0.30 0.77
8.05% 11.35% 10.41%
1.50 1.71 1.54 2.77
3 3 3 3
2019 2020 rating rating rating rating

2.53% 2.10% 12.63% 1.00 1.00 1.00 1.00

3 3 3 3
3 3 3 3
2019 2020 rating rating rating rating
3.56% 12.57% 0.15% 1.00 1.00 1.00 1.00
13.31% 7.04% 4.00% 1.00 1.00 1.00 1.00
8.44% 2.18% 12.83% 1.00 0.92 1.00 0.66
3.00 2.92 3.00 2.66

2016 2017 2018 2019

15.70 18.29 16.06 17.27

20.00 20.00 20.00 20.00
ndus try

2020
8.332053048287 Weight
rating Profitability Ratios
1.00 Return on equity capital
0.84 Return on assets
0.52 Net interest margin
Net non interest margin
1.00
1.00 Net bank operating margin

Earning spread
1.00
Net profit margin
1.00
Asset utilization
1.00
1.00 Equity multiplier
Expense control effeciency
0.64
Cre dit Ris k Fo rmula
Operating effeciency ratio
Ratio > Indus try …….S c o re = – (Ratio  Indus try) +
0.57 Ratio < Indus try …….S c o re = 1
7.25 Average scores * weight

3 Weight
3. Liquidity Ris k Fo rmula
rating Credit risk measures
Provision for loan losses • Purchas ed Funds
1.00
Provision for loan losses Ratio > Indus try …….S co re = – (Ratio  Indus try) +1
1.00 Ratio < Indus try …….S co re = 1
Allowance for loan losses
1.00 • Net Loans Ratio
• Cas h and Due fro m Banks
Allowance for loan losses
1.00
3.00 Average Ratio > Indus try …….S co re = 1
3 Weight Ratio < Indus try …….S co re = Ratio  Indus try
rating Liquidity risk measures
1.00 Purchased funds
1.00 Net loans Ratio 4. Inte re s t rate ris k Fo rmula
1.00 Cash and due from bank
• Inte re s t s ens itivity g ap ratio
3.00 Average
3.381696920285 Weight Ratio > Indus try …….S core = – (Ratio  Indus try) +1
Ratio < Indus try …….S core = 1
 4. Inte re s t rate ris k Fo rmula

• Inte re s t s ens itivity g ap ratio

Ratio > Indus try …….S core = – (Ratio  Indus try) +1

rating Interest sensitivity gap ratio Ratio < Indus try …….S core = 1

1.00
3.381696920285 Average
3.27611738956 Weight Capital ris k Fo rmula
rating Capital risk measures • Equity Capital Ratio
1.00 Equity Capital Ratio • Equity c apital/Ris k as s e ts
1.00 Purchased funds / Liabilities
0.17 Equity capital/Risk assets Ratio > Indus try …….S c o re = 1
Ratio < Indus try …….S c o re = Ratio  Indus try
2.37 Average
• Purc has e d funds / Liabilitie s

2020 Ratio > Indus try …….S c o re = – (Ratio  Indus try) +1

Ratio < Indus try …….S c o re = 1
19.00 scores
20.00
0
S co re = – (Ratio  Indus try) +1
S co re = 1

mula

co re = – (Ratio  Indus try) +1

co re = 1

m Banks

co re = 1
co re = Ratio  Indus try

tio

– (Ratio  Indus try) +1

1
tio

– (Ratio  Indus try) +1

1

atio  Indus try

(Ratio  Indus try) +1