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27 April, 00:33

Bank A (Dollars in Millions) Assets Liability and Equity Cash $ 850 Deposits $ 6,475 Securities 1,925 Other Borrowing 1,645 Loans 5,400 Equity 1,030 Others 975 Total $ 9,150 Total $ 9,150 Income Statement Interest income on loans $ 450 Interest income on securities 95 Interest expenses 246 Noninterest income 78 Nonincome expenses 112 Provision for loan loss 35 Taxes 115 NI $ 115 The bank's asset utilization ratio is

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  1. 27 April, 01:59
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    6.81%

    Explanation:

    Given that,

    Total assets = $9,150 million

    Interest income on loans = $ 450

    Interest income on securities = $95 million

    Non-interest income = $78 million

    The bank's asset utilization refers to the ratio of revenue and average total assets.

    Bank's asset utilization ratio = Revenue : Average total assets

    = ($450 million + $95 million + $78 million) : $9,150 million

    = $623 million : $9,150 million

    = 0.0681 or 6.81%

    The Bank's asset utilization ratio is 6.81%
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