Page 10 - FIN435 RHB vs BPMB

Interest rate ratio

Interest Spread Graph
1.54%
1.53%
1.52%

1.50%
1.50%
1.48% 1.46%
1.46%

1.44%
1.42% Category 1 2018 2017 2016

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 borrowings. The interest rate ratio for 3 year
shown that the ratio is not static. Based on calculation that we make, the ratio for 2016
is 1.46% then its increase to 1.53% in 2017. Unfortunately, in year 2018 the ratio

decreases to 1.50%. this show that the company profitability is not stable due to non-
static ratio.

Liquidity Ratio = Loan to Asset

Loan To Asset Ratio Graph

70.00% 68.76%
68.11%
68.00%
66.00%
64.37%
64.00%

62.00%
Category 1

2018 2017 2016
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. The trend of the
graph is going upward from the year 2016 to 2017 which is 64.37% to 68.76% and its

going downward at the year 2018 at 68.11%. High liquidity risk may lead to low of
liquidity such as not having sufficient of cash and borrowing capacity to loan demand.

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