Analysis of banks' performance
Table of Contents
Project 1
Introduction
Generally considered as the biggest financial crisis since the Great Depression, the Global Financial Crisis (GFC) was followed by the European sovereign debt crisis, which heavily affected most European nations in early 2010. This report will analyse the impact of the crisis on the performance and risk exposure of two major banks: Alpha Bank (AB) and Deutsche Bank (DB).. Alpha Bank, the second largest Greece bank, locates in one of the five Euro-zone nations which suffered the most following the global crisis. At the same time, Deutsche Bank (DB) is a German bank which operates in both investment and commercial banking sectors. In particular, this report will study the asset and liability structure, the performance as well as the market and off-balance sheet risk. Also, the annual performance of 2008 to 2010 will be analysed in order to fully capture the impact of the financial crisis on these selected banks.
1.1 Asset, Liability Structure and Risk Exposures
1.1.1 Analysis of Lloyds Banking Group (LYG)
Table 1: Capital Raising Activities (Liability Structure)
Figure 1
Figure 2
The bank operates in both commercial and investment sections which contents in retail, wholesale, insurance and investment as its main business activities.
Deposit is the main source of funding, given that the proportional ways remains above 50%during these 6 years. Generally speaking, Deposits are more reliable compare to other capital raising activities. Noticing that even during 2008 to 2010, the Deposits were lightly effect by GFC, which means retail deposits are less volatile and less sensitive to shocks. In addition, the bank was voted by Reader’s Digest the most trusted bank of Britain in the 2008. LYG as a function of commercial bank, a large and diversified customer base kept the bank safe during the GFC and European debt crisis.
Wholesale is the second major part of their business. Figure 2 has shown that,
Project 1
Introduction
Generally considered as the biggest financial crisis since the Great Depression, the Global Financial Crisis (GFC) was followed by the European sovereign debt crisis, which heavily affected most European nations in early 2010. This report will analyse the impact of the crisis on the performance and risk exposure of two major banks: Alpha Bank (AB) and Deutsche Bank (DB).. Alpha Bank, the second largest Greece bank, locates in one of the five Euro-zone nations which suffered the most following the global crisis. At the same time, Deutsche Bank (DB) is a German bank which operates in both investment and commercial banking sectors. In particular, this report will study the asset and liability structure, the performance as well as the market and off-balance sheet risk. Also, the annual performance of 2008 to 2010 will be analysed in order to fully capture the impact of the financial crisis on these selected banks.
1.1 Asset, Liability Structure and Risk Exposures
1.1.1 Analysis of Lloyds Banking Group (LYG)
Table 1: Capital Raising Activities (Liability Structure)
Figure 1
Figure 2
The bank operates in both commercial and investment sections which contents in retail, wholesale, insurance and investment as its main business activities.
Deposit is the main source of funding, given that the proportional ways remains above 50%during these 6 years. Generally speaking, Deposits are more reliable compare to other capital raising activities. Noticing that even during 2008 to 2010, the Deposits were lightly effect by GFC, which means retail deposits are less volatile and less sensitive to shocks. In addition, the bank was voted by Reader’s Digest the most trusted bank of Britain in the 2008. LYG as a function of commercial bank, a large and diversified customer base kept the bank safe during the GFC and European debt crisis.
Wholesale is the second major part of their business. Figure 2 has shown that,