Liability Management Essay

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Retail Liability Management As a bank which focuses on wholesale banking, China-Korea Bank grew its business during the past 12 months and earned a substantial profit. As a retail liability manager, my duty is to forecast regular demand deposits, determine consumer and credit card loans and evaluate decisions on service charges that affect regular demand deposits in order to run a profitable bank. In the past financial year, C-K Bank had stable regular demand deposits and has generated profits from those deposits that made the bank more competitive. A performance overview of retail liability management will be given in the following sections. Overview Regular demand deposits are a significant portion of the bank’s liabilities; it represents the major sources of funds which bank uses to make loans or other investments to generate profits. Therefore, maintaining substantial regular demand deposits is extremely important. In the past financial year, our bank had a relatively stable amount of regular demand deposits. Regular checking accounts provided one of the least expensive sources of funds which enhance our bank’s profits. But unfortunately, regular demand deposits tend to decrease quarter over quarter, reduced from 386.0 million dollars to 343.9 million dollars, decreased by 42.1 millions (Table 1). This means our bank was losing customers. However, our bank still managed to maintain a sufficient amount of deposits to meet the needs of loans and other investment activities. Service charge is another source of income generate from regular demand deposits, the net service charge income of 1st quarter was 2.269 millions, 2.248 millions in the 2nd quarter, 1.842 millions in the 3rd quarter and 2.048 in the last quarter (Table 2). Through regular demand deposits, our bank was able to operate efficiently and profitably. Table 1 Regular Demand

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