Description
This is a group project and the only thing I need to do is just the Part C. And the bank we choose is CHASE BANK.
Part A: PERFORMANCE ANALYSIS
Each team will select a bank to analyze.
Go to the bank’s website and locate the Investor Relations page. That page will include all the information for shareholders, investors, and others interested in the company’s stock and financial stability.
Make a short corporate profile summary.
Using the financial statements for the last 3-5 years and the financial ratios studied in class,analyze the bank’s return and risk. Conduct a return on equity decomposition analysis for the most recent year.
Identify at least one peer bank and compare your bank’s return and risk measures to those of peer bank(s). What are the implications of any significant differences? What recommendations would you make to adjust bank’s risk and return profile to improve its performance?
Part B: CORPORATE GOVERNANCE ANALYSIS
Using the information available on the Investor Relations page of the bank’s website (e.g., annual reports, proxy statements, governance highlights), analyze various corporate governance mechanisms (e.g., the structure of the board, board compensation, block ownership, committee composition, code of conduct). Give your opinion of the governance of the selected bank. Explain/document why you think so!
Analyze the compensation of the CEO in your selected bank. Do you think the CEO is overpaid? Do you believe CEOs are overpaid in general? Both “yes” and “no” answers are valid. What matters is your argument in support of the answer. I recommend reading the news and opinions of experts (e.g., WSJ) to better support your argument.
Part C: INTEREST RATE RISK MANAGEMENT
Review the bank’s annual reports for the last 3-5 years to collect information on the bank’s summary analysis of interest rate risk. How does your bank manage interest rate risk? Interpret the data provided in the annual reports and explain each method used to manage interest rate risk.
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Running head: INTEREST RATE RISK MANAGEMENT
Interest Rate Risk Management of Chase Bank
Course’s Name
Student’s Name
Professor’s Name
Institution
Due Date
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Running head: INTEREST RATE RISK MANAGEMENT
Interest Rate Risk Management of Chase Bank
The annual report within the last 3-5 years for the Chase bank in order to have
information on the bank’s summary analysis of interest rate risk collected can be shown
as follow:
•
For the year 2015:
•
For the year 2016:
2
Running head: INTEREST RATE RISK MANAGEMENT
•
For the year 2016:
3
Running head: INTEREST RATE RISK MANAGEMENT
•
For the year 2018:
4
Running head: INTEREST RATE RISK MANAGEMENT
5
From the above annual reports in different years, the bank managed interest rate
risk as national banks worldwide such as Chase Bank has shown an inclination for setting
verifiably low loan costs. In fact, Chase Bank considers the danger of possibly rising loan
fees while picking contract rate fixation periods (FPs). For borrowers with short
obsession periods, a positive loan fee stun can infer a noteworthy lessening in family
units' pay dispensable for utilization (Guillaume, 2016). This can, at last, impede their
capacity to meet their home loan commitments. Given a short normal FP of most bank
subsidizing, longer FP of home loans will in general increment banks' development
Running h...