Page 12 - FIN435 RHB vs BPMB

Asset quality ratio - Non-Performing Loan Ratio

Non Performing Loan Ratio

2.50%
1.93%
2.00%
1.38%
1.50% 1.14%
1.00%

0.50%
0.00%
Category 1

2018 2017 2016
The nonperforming loan ratio, better known as the NPL ratio, is the ratio of the
amount of nonperforming loans in a bank's loan portfolio to the total amount of
outstanding loans the bank holds. Based on the 3 years analysis, the NPL ratio show

upward trend for that consecutive years from 1.38% in 2016, 1.14% in 2017 and
1.93% in 2018. The higher the NPL, the poorer assets quality, the poorer

performance which lead to lower net income and higher loan loss provision.

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 Category 1
0
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.

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