1. How bank annual report is different from non-bank annual report
• Main income in banks income statement is interest from loans whereas in non-banks’ is sale of goods. The main expenditure in banks is interest expense of deposits whereas in non-banks’ it is cost of sales. • In bank annual reports there are unique classes of assets and liabilities. Assets- Loans and advances, Cash and cash equivalents Liabilities- Deposits But in non-banks, the main asset category is PPEs and main liability is loans and advances. • In banks annual report, there are some reports which only related with the banking concept. (Such as consumer banking, corporate banking, SME banking, Global Banking and etc). But in non-bank annual reports do not have such specific business reports. They do mention much corporate information. (Such as Corporate Governance and Share information) • Bank annual reports are prepared mainly under the requirements of Banking Act No.30 of 1998, Banking Act direction No.11 on Corporate Governance for LCBs, listing rules of CSE recommended respective of CG. Non-banking annual reports are prepared under the requirements of Companies Act No. of 2007, and rules of CSE guided by recommended respective CG. • Bank ARs are much complicated and time consuming. But non-banking Ars are not much complicated and harder to refer than banks’ • The objective of bank AR is to show accurate picture about the trade-off between profit and risks. Non-banks AR’s objective is to show how they have gain profits and how they have increased the value of the company. • When referring both annual reports we can indicate that banks have high current and quick asset ratios whereas non-banks have lower ratios.
2. What can you observe on ALCO?
The assets and liability Committee (ALCO) is a risk management committee in a bank that typically consists of the bank's senior management levels. The ALCO's main objective is to evaluate, monitor, and approve procedures linked to risk imposed on by capital structure imbalances. Liquidity risk, interest rate risk, operational risk, as well as outside circumstances that can have an impact on the bank's forecasts and strategic balance sheet allocations are a few of the elements taken into consideration. While the Market Risk Management department takes the proactive approaches in detecting, analysing, monitoring, measuring, and controlling Market Risk, ALCO offers oversight to verify that necessary controls and procedures are in place in accordance with the Board-approved policies and limit framework. The market management risk department is responsible for informing Corporate Management and ALCO on the Bank's overall market risk exposures at any given time as well as its adherence to prudential/risk parameters.