Performance Measurement- To understand how well a bank is doing, its income statement needs to be studied. The description of the sources of income and expenses affect the bank’s profitability. The performance of a bank is achieved and measured through bank planning, personnel development, and financial statement analysis.
Bank Planning
Stating of objectives to achieve the goal of maximization of shareholders’ wealth is necessary.
- The increase in size and diversification of deposit base by offering financial services to retail customers improvement of quality of human resource by upgrading the quality of management expertise in the area of high technology
- lending and employee training
- implementation of an automated delivery system for payment services participation in local community improvement
Personnel Development
Regular training of employees is the key to the smooth running of bank operations. This in the long run results in the best possible performance by the bank and its employees.
Training is conducted for:
- Latest banking operations
- Marketing techniques
- Changes in bank regulations and environment
Financial Statements
Financial Statement includes the following:
Balance Sheet: This is a picture of the financial condition at a single point of time. The accounting year is more or less uniform for the entire economy including banks which is April 1 to March 31. The annual balance sheet is prepared as on March 31 every year.
Income Statement: The income statement of a bank presents the financial performance of the bank in the financial year and shows all major categories of income and expenditure, the operating profit and net profit.
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