Page 11 - FIN435 RHB vs BPMB
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Loan to Deposit Ratio
Loan to Deposit Ratio
1.2 1.03
1 0.86 0.85
0.8
0.6
0.4
0.2
0
Category 1
2018 2017 2016
The loan-to-deposit ratio (LDR) is used to assess a bank's liquidity by comparing a bank's
total loans to its total deposits for the same period.. Based on RHB Bank trend 3 years
analysis, it was recorded that the bank has the highest ratio in 2016 which is 1.03 times, the
second highest in 2018 which is 0.86 times and the lowest in 2017 which is 0.85 times. If the
ratio is too high, it means that the bank has better profit, but higher risk and may not have
enough liquidity to cover any unforeseen fund requirements.
RHB Bank External Comparison Evaluation 2018
1. Profitability Ratio
Return On Asset (ROA)
It shows how capable the management of the bank has been in converting the institution’s
assets into net earnings, The Return on Asset of RHB Bank Berhad Vs Public Bank for the
period basis for the year of 2018 indicates that Public Bank has better Return On Asset
(ROA) which is 1.37% compare to RHB Bank which only record 0.95%. It shows that Public
Bank generate it profits from total asset better than RHB Bank.
Return On Equity
The Return On Equity (ROE) measures the rate return of flowing of income to the bank
shareholders. Based on record Public Bank shows better ROE which is 12.90% compare to
RHB which only 2.22%. It can be conclude that Public Bank generate better profits from its
shareholders investment compared to RHB Bank. This ratio also derived from Return On
Asset Ratio which Public Bank record better ratio than RHB Bank..
INTEREST SPREAD RATIO
The net interest rate spread is the difference between the average yield that a financial
institution receives from loans along with other interest accruing activities and the average
rate it pays on deposits and borrowingsThe net interest spread ratio for RHB Bank for the
year 2018 is 2% which indicates higher net interest spread ratio compared to Public Bank in
that accumulate lower percentage of 1.84% in 2018.
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