Page 12 - FIN435 RHB vs BPMB

2. LIQUIDITY RATIO: LOAN TO ASSET RATIO

Loan on Asset Ratio (LOA) is the ratio used to demonstrate the ability of banks to meet the
demand for loans by using the total assets owned by banks. Based on the data, Public Bank
has higher Loan on Asset Ratio which is 74.65% compared to 68.11% by RHB Bank. This
shows that Public Bank has better the credit performance level than RHB Bank, but at the
same time it may face high liquidity risk which may lead to low of liquidity such as not having
sufficient of cash and borrowing capacity to loan demand.

3.CAPITAL ADEQUACY RATIO: RISK WEIGHTED CAPITAL RATIO

The capital adequacy ratio (CAR) is a measurement of a bank's available capital expressed
as a percentage of a bank's risk-weighted credit exposures., RHB Bank records higher CAR
ratio which is 19.21% compared to 12.8% recorded by Public Bank. RHB Bank has higher
capital adequacy ratio, so we can conclude that it may has greater level of unexpected
losses that it can absorb before becoming insolvent.

4. CORE CAPITAL RATIO

The core capital ratio is a measurement of a company's financial leverage.. Based on the
data comparison, Public Bank has higher ratio of 120.43% CCR compared to RHB Bank that
only records 16.91% CCR. We can conclude that Public Bank has higher company capital
fund dependent towards debt than RHB Bank.

5. ASSET QUALITY RATIO: NON-PERFORMING LOAN (NPL) RATIO
The non-performing loan ratio, better known as the NPL ratio, is the ratio of the amount of
non-performing loans in a bank's loan portfolio to the total amount of outstanding loans the
bank holds.. Based on the data comparison, we can observe that RHB Bank has higher NPL
ratio which is 1.93% compared to only 0.59% by Public Bank. We can conclude that RHB
Bank may face higher credit quality risk compared to Public Bank due to high number of
outstanding loan.

6. ASSET QUALITY RATIO: LOAN TO DEPOSIT RATIO
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 data comparison, Public Bank
has higher ratio which is 0.91 times compared to RHB Bank that only recorded 0.86 times.
We can be conclude that Public Bank may has better profit due to higher number of loan, but
also obtain higher risk and may not have enough liquidity to cover any unforeseen fund
requirements.

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