Bank assets and their structure. The importance of asset information
Information about the assets of the bank - important information for potential investors or investors. On their basis, one can judge about the reliability of a financial institution, about the dynamics of its development and the risks to which investments or investments may be exposed. Such information every citizen can find in the public domain.
But this data, like any other, must be analyzed correctly. You should firmly know the necessary concepts and some features. If you pay due attention to studying the bank for reliability, you can minimize the risks. This is extremely important, especially in times of instability.
Knowledge of the bank’s assets allows the most competent assessment of their liquidity and other features, as well as comparing various options among themselves, selecting the optimal combination of profitability and reliability. To choose such a path means to be confident in the safety of your savings and in the fact that they will not be depreciated as a result of inflation and other negative phenomena.
This also applies to investment. Not to notice the negative aspects in the statistics of the bank means to be exposed to the risk of not making a profit from investing. In the worst case - to lose a significant part of their money. Therefore, the statistics itself is accessible to any citizen: they began to publish it in the appropriate print media and on Internet resources.
The assets of a bank are all that are in its ownership, have a specific monetary value and can be used to achieve certain goals. As a rule, for profit, but other options are possible. The assets include cash, real estate, investors 'and investors' money, as well as financial resources borrowed from other banks and organizations. Resources reinvested by a bank for profit also belong to assets. These include loans issued, property acquired, securities, and so on. For example, the assets of the Bank of Russia in considerable quantities are represented by loans issued to other banks. Such loans may be issued by other large financial institutions.
The structure of bank assets is heterogeneous due to the difference in a number of their properties. The most important of these are riskiness, liquidity and profitability. Usually they are in close relationship. Highly liquid assets are characterized by low profitability and low risk. As yield increases, risk increases, and liquidity decreases. This is because, for profit, financial resources must be used in various activities. For example, in lending and other types of reinvestment. These measures generate income, but the resources invested in them temporarily are not at the disposal of the bank (liquidity decreases). In addition, the failure of such activities can lead to significant financial losses (risk).
One of the main properties characterizing the bank’s assets is liquidity. By such understand the speed with which certain resources can be converted into money, combined with the break-even degree of such treatment. Monetary units themselves have the highest liquidity. In addition to them, this property is inherent in securities and precious metals.
It is worth noting that the liquidity of cash assets of a bank may be different. It depends on the form in which they are available. Resources borrowed from the bank for a sufficiently long period are low liquid. Buildings, equipment, vehicles and other property also have this disadvantage.
Another property characterizing the assets of a bank is their profitability. It clearly demonstrates the ability of a financial institution to competently manage assets, its pace of development and its reliability. The higher the yield shown, the lower the risk to which the financial resources of investors and investors are exposed.
To determine the profitability of the required information about the assets. This value should be divided by the profit of the bank. The result is the desired rate of return. Knowing it, you can compare with each other suitable for investment options, choosing the best.
Where to find such information?
Information about the size of bank assets can be obtained by every citizen. It is published in the relevant section of the official website of the Central Bank.Every commercial bank periodically provides this information, as this is subject to the relevant federal law.
In addition, all the necessary information can be found on the websites of the banks themselves: it is presented in as much detail as possible and in an accessible form. There are also specialized Internet resources providing such data. However, the site of the Central Bank is considered a more reliable source, since the rationale for the information it provides is the corresponding reports.