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Presented by
Manika Tuli
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      is the risk that, the
    
value of its assets and liabilities and also its
net interest income may get adversely affected
on account of movements in interest rates.
 
 . It involves a likelihood of
demand for funds from customers exceeding
supply of funds forcing banks to sell or collect
assets at a loss or borrow at a high cost.
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TOOLS

GAP ANALYSIS DURATION ANALYSIS VALUp AT RISK STRpSS TpSTING



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Maturity 1-28 days 29days- 3
29days- 3months-
3months- 6months-
6months- 1-3yr 3-5yr Over 5yrs Non
Bucket months 6months 1yr sensitive

Rate V  V        VV 


Sensitive
Assets
(TOTAL)

Rate  V       V V    V 


Sensitive
Liabilitie
s
(TOTAL)

Sensitivit  V  )  )V  ) VV V V


y Gap
(RSA--
(RSA
RSL)

GAP !V !V !V ! !  ! V!V


RATIO
Gap Interest rate changes Impact on NII

Positive Increase increase

Positive Decrease decrease

Negative Increase decrease

Negative Decrease increase


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On
On--Balance Sheet adjustments

Off
Off--Balance Sheet items

Securitization
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Liquidity Ratios of PNB

Ratios Particulars 2006 2005

1) Current Ratio Current Assets / Current Liabilities 0.909324 1.08701

2) Debt pquity Ratio Total Liabilities / Total Shareholders' pquity 15.46828 20.4181

Investments+ Fixed Assets + Other Assets/ Cash


and balance with RBI + Balance with Banks and
3) Core Assets to Non Core Assets Money at Short and Call Notice + Advances 0.765568 0.8.58772

4) Purchased Funds to Total Asset Borrowed Funds + Deposits / Total Asset 0.838752 0.87173

5) Liquid Asset to Total Asset Liquid Assets / Total Assets 0.08784 0.0862

6) Core Assets to Total Asset Tier 1 capital / Total (Risk


(Risk--adjusted) Assets 0.064648 0.04897
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DU PONT RATIOS OF PUNJAB NATIONAL BANK

Ratios 2006 2005

Net Income 87254092 85378845


Total Assets 1262412809 1023317419
Total Revenue 101355293 96465749
pquity 81612992 50118070

Profit Margin (net income/total revenue) 0.86 0.88

Asset Utilization (total revenue/total assets) 0.08 0.09

Return on Asset (net income/total assets) 0.069 0.079

pquity Multiplier (total assets/equity) 15.47 20.42

Return on pquity (net income/equity) 1.069 1.613



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selling assets!
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 The bank sells assets (loans) to a trustee  
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