Page 18 - FIN435 RHB vs BPMB

Interest Spread Ratio

Interest Spread Graph

3.50%
3.05%
2.76%
3.00%
2.22%
2.50%

2.00%
1.50%
1.00%

0.50%
Category 1
2018 2017 2016
0.00%
The net interest rate spread is the difference between the average yield that a
financial institution receives from loans along with other interest. The net interest

spread ratio for 3 years trend from 2016 to 2018 indicate downward trend from 2.4%
in 2016 to 2.1% in 2017 and to 2% in 2018. This evidence and data lead to decrease

in profitability of the company.

2. Liquidity Ratio = Loan To Asset Ratio

Loan To Asset Ratio Graph

80.00% 78.97%
78.00%

73.93%
76.00%
74.00% 73.13%
72.00%

Category 1
70.00%

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. Based on trend
analysis from 2016 to 2018, the trend decreased from 78.97% in 2016 to 73.13% in

2017, and show upward trend to 73.93% in 2018. The bank records a high (LOA) for
this 3 year that more than 50 % of its total asset that may lead to liquidity risk. 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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