Ask Question
8 April, 22:26

A bank has an allowance for loan loss of $4.5m at the beginning of the year and $4.2m at the end of the year, non performing loans of $6.2m at the beginning of the year and $5.8m at the end of the year, and has net charge offs of $2.7m in bad loans. what was the bank's provision for loan loss for the year?

+5
Answers (1)
  1. 8 April, 22:47
    0
    0.259

    Explanation:

    difference in loan loss allowance in the year = 4.5-4.2 = 0.3m

    difference in non performing loans in the year = 6.2-5.8 = 0.4m

    Provision for loan loss = (difference in loan loss allowance + difference in non performing loans) / net charge offs

    provision for loan loss = (0.3+0.4) / 2.7=0.259
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A bank has an allowance for loan loss of $4.5m at the beginning of the year and $4.2m at the end of the year, non performing loans of $6.2m ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers