--%>
Assignment Help - homework help

Commercial Banking Assignment

Part I

Guidelines and requirements: The questions in Part I of this assignment are based on the materials covered in Units 1 and 2. Please write a short-essay answer to each question.

Question 1

You have just been hired as a branch manager for a large bank in Hong Kong. You were told that the bank is going to open a new branch at the Island Learning Centre of the Open University of Hong Kong in Sheung Wan. The management of the bank is concerned that the new branch may not be able to attract enough customers to meet its profit projection. Your task is to recommend the various services the bank should offer initially to build an adequate customer base. The following is a list of the services the branch could offer:

  • current accounts
  • savings deposits
  • security underwriting
  • personal trust management services
  • retirement savings plans
  • venture capital loans
  • plant and equipment loans
  • automobile loans
  • residential real estate loans
  • home improvement loans.

a List five types of information you will need about the local community to help you decide which of many possible services are likely to have sufficient demand to make them profitable. Explain

your answer briefly. b Divide the possible services into two groups: those you think should be offered opening day and those you believe can be offered later as bank grows. Explain your answer. 2 FIN B381 Commercial Banking

 

Question 2

For a better understanding of banking industry, it is important to look at the environment in which commercial banks operate. Production expansion and globalization are two major forces reshaping the banking industry today. The following two questions are related to these two issues. a Describe one of the new banking services offered to customers by many local banks. Discuss the potential benefits and challenges to these banks that are brought about by the introduction of this new service. (15 marks)

b Hong Kong is an international financial centre and many foreign banks want to establish their presence in the city. In view of public welfare, should the government impose more restrictions against? the entry of foreign banks into Hong Kong? Explain the rationale behind your answer. 

Part II

Guidelines and requirements: There is only one question in this part. The question is designed to provide a platform not only to show that you know and understand the material, but that you can use it to analyse situations. Therefore, your answer will be graded on the basis of completeness, justification and presentation skill. So be sure you keep these criteria in mind as you prepare your answers. Good luck!

 

Question 3

Read the article 'Back in expansion mode' on the following pages and answer the following questions:

a List out five business areas that local banks are turning to in search of profits. Describe each business area briefly and evaluate the prospect of growth in each area critically.

b In the article, Monica Ng, Assurance Partner of PricewaterhouseCoopers Hong Kong said, 'the smaller banks are at risk of losing out to their larger counterparts.' Please explain the challenges faced by smaller banks and suggest way to overcome these challenges. 

   Related Questions in Corporate Finance

  • Q : Liquidity Ratios Liquidity Ratios :

    Liquidity Ratios: Such ratios comprise the Current Ratio and the Quick Ratio or the acid test ratio. Liquidity ratios demonstrate the Liquid position of a company in the short term that is the capability of a firm to pay its obligations in short term.

    		•
  • Q : Problem on optimal capital structure

    XYZ Company has debt/assets ratio 50%, that is too high and it must be at 45% to be optimal. This debt reduction must also reduce the bankruptcy costs by $30 million. At present, XYZ has 5 million shares of common stock selling at $50 each. The tax rate of XYZ is 30%.

    		•
  • Q : Problem on implied exchange rate a) The

    a) The Australian firm sold a ship to a Swiss firm and gave the Swiss client an option of paying either AUS10,000 or SF15,000 in 9 months. (i) In above, the Australian firm efficiently gave the Swiss client a free option to buy up

    		•
  • Q : Problem on annual obligation payment

    ABC Corp. has a challenge: The CEO wants to set aside annual, end of year payments into a sinking fund account earning 5% over the next 6 years in order to retire $25 million in bonds that will be outstanding at that time. Determine the annual payment required each ye

    		•
  • Q : Assessing market expectations using CAPM

    Assume that the risk-free rate is 1% and the expected market return is 9%. You are considering purchasing Super Soft stock, which currently sells for $100 a share and will pay its next (annual) dividend of $1.00 exactly one year from today. Super Soft is considered to

    		•
  • Q : Variance of a portfolio The variance of

    The variance of a portfolio of 40 stocks will be the addition of _______ variance terms and _______ covariance terms. A) 40; 1560B) 40; 1600C) 80; 40D) 1600; 40

    		•
  • Q : What is the expected risk premium on

    You have decided to invest 30 percent in X; 30 percent in Y; and 40 percent in Z. Theprobability of the state of the economy is Boom 25%; Normal 60%; and, Bust 15%. The rateof return for stock X is Boom .20; Normal .15; and, Bust .00. The rate of return for stock Y is

    		•
  • Q : CAPM-Project Evaluation and Risk

    UCD Vet Products – a hypothetical publicly traded corporation (UCDV) — is considering investing in a new line of equine DNA analysis technology for race horse breeders. The project will yield the net cash flows listed in the table below. Assume that this p

    		•
  • Q : Who was the first to quantify the idea

    Who was the first to quantify the idea of Brownian motion?

    		•
  • Q : Define Project Financing Project

    Project Financing: It is the procedure of determining how to go around obtaining the resources needed in managing the costs related with the launch and continuing operation of a project. Whereas this procedure sometimes comprises the re-allocation of

    		•