Page 22 - FIN435 RHB vs BPMB
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Core Capital Ratio
The core capital ratio is a measurement of a company's financial leverage. Based
on the graph comparison Bank Pembangunan has higher ratio 31.22 % than
Agrobank 23.1%. We can conclude that Bank Pembangunan have higher company
capital fund dependent towards debt than Agrobank.
4. Asset Quality Ratio
Non-Performing Loan Ratio
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 graph comparison we can observe that
Bank Pembangunan has higher NPL ratio which is 12% compared to only 3.2% by
Agrobank. We can conclude that Bank Pembangunan may face higher credit quality
risk than Agrobank due to high number of outstanding loans.
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 graph
comparison, Bank Pembangunan has higher ratio that is 3.19 times than Agrobank
that only recorded 1.02 times. It can be concluded that Bank Pembangunan may has
better profit due to higher number of loans, but also obtain higher risk and may not
have enough liquidity to cover any unforeseen fund requirements.
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