BIT Bank (in millions) Assets: Reserves $48 Loans $360 Liabilities: Deposits $340 Bank Capital $68 NAT Bank (in millions) Assets Reserves $48 Loans $360 Liabilities Deposits $400 Bank Capital $8 Assume that both BIT Bank and NAT Bank have the same net profit after tax of $8 million
a. Which bank (Bank BIT or Bank NAT) is riskier in case of loan depreciation at $60 million? Explain. Show your calculations to explain your answers.
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Expert's answer
2020-03-27T10:22:24-0400
с) Bank NAT is riskier in case of loan depreciation at $60 million:lower coverage
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