Topic 8 Financial Institutions

MFK FIN536 Topic 8

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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

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

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Risk of non payment of borrowing/financing provided to a borrower on maturity date.

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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 the market to meet requirements.

funds in

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

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

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Products offered (Commercial banks)

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Deposits Loan/ Financing

Saving Current
Block discounting Bridging loan Property loan Overdraft facility Club membership loan Computer loan Factoring facility Fixed asset loan

Fixed Deposit / GIA
Contract financing Education loan JV Property loan

NICD

FRIA
Share loan
Shop house loan

Equipment loan Leasing Floor stocking HP agency Hire purchase Home loan Industrial HP Personal loan Plant & machinery Project financing Property loan RC facility
MFK FIN536 Topic 8

Sundry loan Syndicated loan Term loan Tour financing Unit trust loan
Working capital loan 14

Trade Finance

Letter of credit Trust receipt Banker’s Acceptance

Export credit refinancing Shipping guarantee Bank guarantee

Cards services Money markets

Debit card Credit card BNM Bills Commercial papers MGS Negotiable debt certificate

Interbank borrowing REPO

Banks

Conventional Islamic
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Features.

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Reflection 1 Reflection 2 Reflection 3 Reflection 4

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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.

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Read on banking regulation and management.

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THANK YOU…
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