Banking Financial Management & Financial Markets

Banking Financial Management & Financial Markets Written by Md. Hasan MBA in Accounting and Information Systems University of Dhaka Email: [email protected]  Contents Introduction 3 Part A 3 A. Ratio Analysis and the evaluation of the Barclays Bank Performance for last five years 3 B. Assessment of the Barclays Bank’s interest rate risk and liquidity risk exposure using appropriate techniques 7 C. Recommendations on how the Bank can increase profitability and mange liquidity through mitigation 9 Part B 11 A. How the instrument is priced 11 B. How the instrument is hedged against risks 17 C) How the instrument is traded / exchanged 19 Conclusions 21 References 22 Introduction Banks and other financial institutions play the key role in the economic development of a country. There are some risk basically interest rate risk, liquidity risk, currency exchange risk etc. In this report I will analyze the financial performance of last five years of Barclays Bank. This report also presents the DuPont analysis, profit margin, liquidity ratio ROA, ROE of the bank. This paper suggests how the bank can increase operational efficiency and profitability to dominate the market. There are different financial instruments issued by financial institution to draw capital. The pricing strategies of the instruments like capital asset pricing model, efficient market hypothesis, behavioral finance etc. this paper also covers these pricing strategies and the different risk associated with these instruments. Trading systems of these instruments like in initial public offering, in secondary market are also covered in this report. Part A Ratio Analysis and the evaluation of the Barclays Bank Performance for last five years Bank is a financial institution that collects the deposit from different clients and lends the collected money to the various business organization or individual or group of people for specific purpose. A bank is basically operated based on liability collected from customer. It contributes to the economy of a country in different ways. To make a country industrially developed and to make a powerful economy the financial institutions play the key role in a country. Since bank conducts business depending on others’ money, so it should keep proper and accurate account of its activities. People make decision analyzing the financial position and performance of a bank whether to invest or not. The financial statements of a bank reflect the scenario of financial position and performance of the related bank. There are different tools and techniques to analysis the financial statements. The tools are ration analysis, trend analysis and common size analysis. There are different types of ratio analysis like liquidity ratio, solvency ratio, profitability ratio, and activity ratio (Saunders and Cornett, 2011). There are various reason of analyzing the financial statements basically assessing credit risk, valuing equity securities, assessing the subsidiary’s performance conducting due diligence related to an acquisition etc. In the following section I have conducted the Return on Equity (ROE) and Return on Asset (ROA) analysis of the Barclays Bank ltd for the year 2009-2013 (Barclays.com, 2015). Calculation of ROE and ROA of Barclays Bank: Year/ Formula Net profit Margin × Asset turnover × Equity Multiplier= Return on Equity (ROE) Net profit Margin* Asset turnover=(ROA) Formula 2013 4.6% 0.0217 20.77 2.07% 0.1% 2012 2012 0.13% 0.017 23.70 0.05% 0.00221% 2011 2011 12.22% 0.021 23.99 6.16% 0.26% 2010 2010 14.16% 0.021 23.78 7.07% 0.3% 2009 2009 34.38% 0.022 23.50 17.77% 0.76% *Amount is in million Source: Barclays Bank annual report (2009-2013) Graphical Presentation of ROE and ROA of Barclays Bank: Return on Equity (ROE) ROE measures the ratio of net income and shareholders’ equity. It calculates the net income against the stockholders’ equity. An investor get idea of how much money is earned from the invested money. It gives an idea of how a company creates value for its stockholders. Simply ROE can be calculated by the following formula; Return on Equity = Net Income/Shareholder's Equity There is a useful tool that is decomposition of ROE into its component parts to get idea of what derives a bank or organization’s ROE. Decomposition of ROE is also called the DuPont analysis that is expressed in the main ratio as the product of component ratio. It helps a company to determine the causes of change in ROE over time and indicates what area needs extra focus to increase ROE. A company’s overall profitability is a function of its operating profitability, efficiency, taxes and use of financial leverage (Rose and Hudgins, 2008). The DuPont analysis formula; ROE = (net profit margin) * (asset turnover) * (equity multiplier) ROE = (net income / Operating revenue) * (Operating revenue / assets) * (assets / shareholders' equity) ROA= (net income / Operating revenue) * (Operating revenue / assets) So we can write; ROE = ROA * leverage In the above table, I have shown the Return of Equity of Barclays Bank for five years starting from 2009 to 2013. Here we see the ROE of 2009 is 17.77%; in 2010 is 7.07%; in 2011 is 6.16%; in the year of 2012 the ROE is very poor i,e 0.05% and finally last year of 2013 the bank’ ROE has increased little bit. So we see the earlier years the bank’s performance was good; that is the shareholder got greater return. But in later like in the year of 2012 ROE is very poor. But in the last year of 2013 the bank’ profitability starts to increase. Profit margin ratio: profit margin ratio is the indicator of profitability that indicates how much money a company generates from per unit of sales. We see in the above table; profit margin ratio of 2009 was 34.38% but in 2012 is 0.13% and in the last year it again increases to 4.6%. Asset turnover ratio: it is the indicator of efficiency that measures the revenue a company generates from per unit of its invested asset. We see in the table no is no significant variation in the asset turnover of the selected Barclays Bank. Equity multiplier: It is the indicator of solvency that measures the asset and equity ratio. The Bank’s financial leverage is also almost same through all the five years. Minimum financial leverage is 20.77% and maximum is 23.99% Return on Asset: ROA indicates the efficiency and effectiveness of the management. It refers the amount generated from the asset invested. It is the percentage of earning against total asset. The formula of calculating ROE; ROA= (net income / Operating revenue) * (Operating revenue / assets) ROA= (net income/asset) ROA of the Barclays bank was in 2009-.076%; in 2010-0.3%’; in 2011-0.26% and in 2012 0.00221%. So ROA decreases over the four year but in 2013 the ROA is 0.10%. so in 2013 it increases. Assessment of the Barclays Bank’s interest rate risk and liquidity risk exposure using appropriate techniques Interest rate risk: Interest rate risk is the uncertainty of earnings or capital resulted due to the change in interest rate. The differences between the cash flow timing and the timing of rate changes are the main causes of interest rate risk. Interest rate risk basically affects the bondholder rather than shareholders. Interest rate risk affects the Barclays Bank’s reported earnings and book capital by altering; The market value of trading accounts and instruments, Net interest income Other income responsive to income and expenses like servicing fees, mortgage etc. The bank’s underlying economic value is also affected by the changes in interest rates. The assets, liabilities and interest-rate-related off-balance-sheet contract are also affected by the alteration of rates. Interest rate risk assessment: It is very important for the Barclays Bank to measure accurately and timely the interest rate risk for good risk management and control. The risk control department of the bank should identify and measure the main sources of interest rate risk exposure. Risk measurement systems should specify the risk arising from bank’s new operation or customary activities. Risk measurement system may vary from bank to bank. Three basic risk measurement systems adapts to measure interest rate risk are; gap report, net income simulation model and duration model. Gap reports: This is widely used to measure and control interest rate risk exposure like maturity imbalance, re-pricing. Yield curve risk, option risk, basis risk can’t be identified by simple gap report. A gap report divides all asset, liabilities and off-balance sheet items based on duration. It reports assets on positive amount and liabilities on negative amount. Then it measures the risk of interest rate based on the size of gap. By gap report, the Barclays bank can identify shorter and long term re-pricing imbalances and can predict the profitability and economic risk. Before assuming about new business or effectiveness of reinvestment, a bank can identify the re-pricing risk by the use of gap report. A bank may have positive, negative or neutral gap within given time band. Positive gap arises when maturity of asset is greater than that of liabilities. Bank Simulation Models: The Barclays Bank can also assess the interest rate risk arising from current and future business scenario by using the bank simulation model. A bank’s risk exposure is simulated by this model under various scenarios and assumptions. Earnings simulation model is better than gap report. This model is also used by bank in budgeting and profit planning, and analyzing alternative business decision and to justify the effect of those decisions. Duration model: there are many economic sensitivity models to measure the duration of bank financial instruments. Duration model measures the sensitivity of market values with a small variation of interest rate. Market value of fixed income instrument decreases with the increase of interest rate. Duration measures how much decrease the value with the change of interest rate. It is basically used to estimate the relative risk of different types of financial instruments, investments strategies and portfolios. Liquidity risk: This is the possibility of bank’s failure to cash meet the demand of customer due to shortage of cash money. It is a great problem of financial institutions. So management should stock sufficient money to satisfy customer’s demand. If bank fails to meet the customer demand, it creates dissatisfaction to customer mind and customer may switch to other bank. So the Barclays Bank can estimate the liquidity risk conducting ratio analysis like current ratio, quick ratio and cash ratio. Quick ratio measure the bank’s ability to meet short term demand of customer (Wernz, 2014). C. Recommendations on how the Bank can increase profitability and mange liquidity through mitigation All financial institutions are operated for the purpose of making profit. A bank collects deposits from the clients at comparatively lower interest rate and lends the collected money to different individuals and business organization at higher price. The difference between the two interest rates is the main source of profit of a bank. The Barclays Bank can increase profit by applying following revenue strategies; Enhance Fee Collection Efficiency: To increase profitability, management should emphasize on the fee collection area. It should improve the collection policies and billing practices to reduce refunds and waivers, billing slippage etc. Enter New or Expanded Markets: The bank should analysis the market opportunities in different area to expand its Business. Bank should set the specific goal for all the branches and compare the target goal and actual performance. Bank can increase profitability by setting both long and short term sales goals for each office(Anon, 2015). Innovation of new product and services: A bank can increase profitability and build position to dominate the market by innovating new product and services. Some new offers for increasing fee income may by mobile wallet, P2P payment, expedited payment and treasury management. Management must consider the cost and expected profit before introducing new product. Enhance Sales and Marketing Effectiveness: Management should formulate strategy to acquire maximum share of customer’s wallet and to increase cross-selling performance. Introducing advanced technologies and increasing the efficiency of customer facing employees by giving them proper training, the bank can grow its profit earnings. To increase marketing efficiencies, management can use online marketing strategies, social media etc(Berk and DeMarzo, 2007). Optimize Service Pricing: The pricing analysts should set price reasonably and consider the price of the same service of other banks. It is most important for any financial institution to dominate the market. If bank increase service charge, clients may switch to other bank. So pricing analysts should consider the market condition and analyzing the market, they should fix the price. Reduction of internal cost: Bank must reduce its operating cost to increase profit. Management’s efficiency and effectiveness is very essential to control the operating cost and the risk related to it. Management of Liquidity Liquidity refers the ability of a bank to meet the cash demand of customer when they want. The prime concern of any financial institution is to manage the liquidity that is the successful treasury management operation. Liquidity management is the process of predicting risk, developing bank relationship, risk management, communication and transparency. Customer must be paid on demand to ensure lasting customer relationship (Bessis, 2011). Five Key Liquidity Principles The following principles can be adopted by the management of the Barclays bank to manage the liquidity and mitigating risk; Accurately predicting the cash demand of the customer, and maintaining the maximum level of cash available to satisfy expected and unexpected demand the customer. Developing appropriate investment policies where the bank will invest or not emphasizing the safety and availability of the invested money. Diversifying the investment in various short term, medium term, and long term sources Ensuring the efficiency and transparency of cash management and increasing the ethics and honesty of the personnel So increase profitability, a financial institution must control the interest rate risk, liquidity risk, exchange rate risk etc. and provide better service to ensure customer satisfaction. I believe that adopting the above strategies and techniques the Barclays Bank can grow its profitability and productivity (Pilbeam, 2010). Part B A. How the instrument is priced Financial instrument Financial instrument can be defined as a virtual or real document that indicate a valid agreement between two or more parties with issuing the rights to payment of money and has an economic value. There are equity based, debt based and asset based financial instruments are available. Some examples of financial instrument are bond, share, draft, bill of exchange option contract etc. Factors that affect share price Share price of an organization is basically depends on its financial performance and some other factors and it is determined in marketplace on demand of buyers. Two basic issues basically affect the share price of an organization are the performance of related company and some external factors which are briefly explained below; Financial performance: Every listed company discloses their financial condition through annual report to make financial information available to potential and existing investors. So the investors can gather that information from secondary sources and estimate the company’s future potentiality and take decision to buy or sell the share of the company. So, basically stock price depends on two things that are Price Earning Ration (PER) and Earning Per Shares (EPS). If these two things increase, share price will also increase. In the below diagram, we see stock price increases with the increase of Earning per Share (Pais and Stork, 2011). So, EPS, dividend per share, expected growth in earning base, cash flow per share, discount rate and the possible risk associated with the share are the key factors that affect the share price. Technical Factors There are some external factors that hold the ability to determine the supply and demand of financial instruments. In the following section the external factors that influence share price are described; Inflation: inflation an important indicator of economy influences the stock price. If inflation rate is higher than there will be lower multiples. And lower inflation causes higher multiples. But deflation is not always good for share (Berk and DeMarzo, 2007). Economic Strength of Market and Peers: financial performance of similar organization also influences the potential investors to make investment decision. For example if financial performance of some financial institution is not satisfactory, then investors find alternative industries except financial institutions. Incidental Transactions: some incidental purchase or sales of share driven by portfolio objectives like to evade some other investment risk can influence share price and demand and supply of stock. Demographics: Some demographic characteristics of investors affect the share price. For example the more middle-aged people among the investing community, the more demand of shares and valuation multiples. Liquidity: liquidity refers the interest level of an investor to the share of a specific company. For example, since share of Wal-Mart is highly liquid, investors will be encouraged to the share of that company. Market Sentiment: It indicates the market participants’ psychology which may be biased, subjective and obstinate. So it also affects the share price of an organization (Choudhry, 2011). Instruments pricing model: Pricing model refers the way how a firm set the price of its products. There are three basic model of pricing financial instruments such as Capital Asset Pricing Model (CAPM), efficient market hypothesis and behavioral finance. These are explained below; Capital Asset Pricing Model (CAPM): This a method of pricing an specific bond or securities by measuring the value of and investment and drawing a relationship between the expected profit and associated risk. This method is used to find the required rate of return from any risky asset like share, bond etc. The expected rate of return increases with the increase of inherent risk level (Bessis, 2011). Using CAPM, an investor decides the price of share based on risk and expected return. For example risk level of XYZ Company is greater than that of ABC Company. So share price of ABC is higher than XYZ. Assumptions of CAPM Investor are always try to avoid risk and prefer low risk asset They invest to gain economic benefit Investor can not influence the price Investors need not to incur any taxation cost or transaction costs It is seemed that investors have similar expectation All the relevant information of the companies are equally available to all the investors. The CAPM formula ra = rrf + Ba (rm-rrf) Here; ra=The rate of return of a risky security rrf = The rate of return for a risk-free security rm = The market rate of return  Ba = the beta of asset Let the risk free interest rate ( rrf ) is 5%; market rate of return (rm ) is 8 % and beta is 0.5 of ABC company. So the expected rate of return (ra ) of the share of that company is ra = rrf + Ba (rm-rrf) ra=5+0.5 (8-5) = 6.5% So, expected rate of return of the assumed company is 6.5%. If estimated price is higher than market price then the stock price considered overvalued, and if estimated price of a share is lower than market price than stock price assumed undervalued. So share price of an organization can be fixed by applying the CAPM. But the CAPM has some criticism. It assumes that all information is equally available to all users but it is not true. There requires transaction and taxation cost. Again all investors are not risk averse. Some investors prefer risky instrument to gain higher profit (Lee and Hsieh, 2013). Efficient Market Hypothesis (EMH) An investment theory that assumes that financial market is informational efficient that is stock price reflects all necessary information. It states that shares are always traded at their fair value and it makes impossible to purchase undervalued stock or sell stock of overvalued to investors. The EMH assumes that since all information is reflected by stock price and market are efficient; it is a game of chance not the application of skill. If information cost decreases, than the market will be efficient market. The stock price that reflects more information can draw investors’ attention (Francis and Kim, 2013). Efficient market hypothesis is of three types that are weak, semi strong and strong. Weak from of efficiency: Weak version of EMH assumes that price of risky asset like bond, stock and property etc. reveals all publicly available security market information. Semi strong version of efficiency: semi Strong version of EMH assumes that stock price reveals all currently available information and share prices change to reflect new public information. Strong form of efficiency: it assumes that share price even reflects hidden information also. That is the strong version reflects all public and private information. In this form of efficiency, no one get extra information. Behavioral finance Basically investors are invests in stock market for earning money; they are rational for maximizing wealth. In this field effective and tactful decision is very important. But some unexpected events like emotion, psychology influence the participant’s decision that leads to irrational and unpredictable way. Behavioral finance explains why investors make irrational or unpredictable decision combining behavioral and cognitive psychological theory with conventional finance and economics. Different social, psychological, emotional, and cognitive factors lead an investor’s or institutions economic decision in incorrect way. These types of factors impact the price and return, and create market inefficiencies. Behavioral finance investigates why investors make illogical systematic errors and how other participants take advantages due to such errors and inefficiency of market (Francis and Kim, 2013). There are two basic building blocks of behavioral finance; one is cognitive psychology and the other is limits to arbitrage. Cognitive indicates the way of people’s thinking. People make different systematic error in decision making due to overconfident and giving more weight on recent experience. And the Limits to arbitrage indicate the prediction of what arbitrage forces will be effective and when the force won’t be effective. There are some differences between the behavioral finance and EMH. The EMH assumes that markets are rational but investors are not rational. It assumes that market can’t predict the future. On the other hand financial markets are inefficient in some circumstances. Behavioral finance is used to estimate a firm’s equity, share price, bond price, debt etc. From the following hypothetical data we can calculate the equity of a firm. Let inflation rate is 6% and equity risk premium is zero. Nominal cost of capital is 10% and real cost of capital is 4%. There is no real growth and it distributes all free cash flow as dividend. Particulars Amount Revenue $1,200,000 Cost of Goods Sold $600,000 Administrative Expenses $400,000 Interest Expense $200,000 Taxes $0 After-tax profits $0 Debt $2,000,000 Book Equity $1,500,000 Shares outstanding 10,000 Interest rate on debt 10% So the firm should issue $120,000 more debt next year to keep the real value of its debt same with the inflation rate is 6% and debt of 2m. By using the growing perpetuity formula we can calculate the share price. growing perpetuity formula P = Div1/(r – g) with r = 10% and g = 6%, Div=$12; P = $12/(0.10 – 0.06) = $300 per share. So the equity is worth $3 million, or $300 per share B. How the instrument is hedged against risks Hedging: Risk is an integral part of investment. Investors invest on share market based on estimated and market data taking risk. The hedging techniques help an investor to mitigate risk and to protect himself. Hedging is a called a risk management strategy that is used to limit or mitigate the risk from the unexpected variation of the price of share, bonds, commodities, currencies, or inflation rate. It protects an investor from loss causes from investing in different financial instruments like stock, bond or notes. For example insurance is one type of hedging. If an individual contracts with an insurance company for his factory; the insurance company pays the individual for the loss arising from fire, strike or other incidents. This is a hedging strategy. How hedging works: In financial sector also hedging is used to mitigate risk. An investor hedges his stock to minimize risk. For example, in January an investor holds 100 shares of stock M at $5.00 per share. If the investor thinks that the stock price may go down, then he can use option contract to hedge his position. In this case, if he contract for $0.50/share premium, then the investors will be given the right to sell the 100 share at $5.25/share if price decreases. Like in the next month the price goes down to $4.00, the investor can sell share at $5.25/share. There are different categories of risk that can be protected by hedging. The categories of risk are as follows; Credit risk: the risk related that money not be paid by the borrowers. This type of risk is basically related with financial institution. Commodity risk: This type of risk arisen from the value movement of commodity contracts like metals, energy products, agricultural products (Inoue, 2006). Currency risk: Currency risk arises from the change of currency rate. Investors who invest in foreign company may face currency risk. Liquidity risk: The possibility of failure to meet the demand of clients of bank. If bank can’t satisfy the demand of depositors, they may switch to other bank. Interest rate risk: this risk related to change in interest rate of interest bearing liability like bond or loan. Using interest rate swaps or fixed-income instruments this type of risk can be hedged (http://www.accaglobal.com, 2015). Risk Measurement Risk is not always a negative thing in investment. It should be measured correctly to make efficient decision. There are five strategies to measure risk which are explained below; Standard deviation: Standard deviation is the primary measure of risk. It tells how the investment will fluctuate with average return. Calculating standard deviation, an investors or firm can estimate risk. Chance of loss: it measures the possibility of losing fund money versus making money. When a fund loses money, the investor requires being patient. Beta ratios: this is also used to estimate the risk of an investment comparing to market risk. Market beta is always 1. So let beta of a fund is 2.00, so the risk of that fund is more risky than market. If the beta of the fund is 0.5, then it is less risky. Hedging strategy: Spread Hedging: index investors are very much cautious moderate price declines. Price may declines unpredictably. So a bear put spread may the best way to reduce risk. Diversification of portfolio: an investor can invest indifferent portfolio; and if one portfolio face lose, the investor can recover it from the gain of other portfolio. Long only strategies: it is an investment strategy related to hedge fund. It related to buying long equities and selling short equities that are probable to decrease in value. Investor can at the same time buy a call option and sell a put option and reduce risk. The main problems of long only hedging strategy is that there are competition from other asset manager and cost of hedge fund management. Short only strategy: Short only strategy: Short hedge is referred to the hedge that position is short and taken for future contract. It is assumed that the asset will be sold at future. C) How the instrument is traded / exchanged Financial instruments are traded in almost same way in the world. There is little bit difference in trading systems. In New York Stock Exchange, buyer and seller trade stock in continuous auction format. Here trader performs securities transaction on behalf of investors. Broker performs the role of the auctioneer in an open outcry auction market and accumulates the seller and buyer to execute auction. They provide all necessary information to traders and bring the seller and buyer together. Client can also trade via electronic hybrid market and send order for electronic execution immediately. Again, in Tokyo Stock Exchange, stocks of the listed companies are separated into tow section; first section of large companies and the second section that trades the securities of mid size companies. Stock trading can be different types; some are explained below; Day trading: this type of trade of financial instruments occurs on a day and before the market close. In this trading, participant are called day traders or active traders. Here very quick decision is required. Short term trading: Short term trade period is more than one day to few weeks. Here sell or buy occurs within the mentioned period. Medium Term and long term trading: A few weeks to a few month is the medium term period and from few months to many years is long term trading. Some investors hold securities for medium term period and some may hold for long term period. Stock trading in the international market can be occurred by Initial Public Offerings (IPO), Secondary markets or by brokers or secondary intermediaries. Initial Public Offerings (IPO): In the primary market, basically securities are created. In the IPO shares are sold to the institutional traders which are sold to public later. Companies use IPO to sell stock and turn into public company. An IPO helps an organization to attract investors and enlarging capital base and also to develop good public image. The price of share in IPO is determined basically two ways with the help of a lead manager. So an IPO can be determined through fixed price method or determined depending on the demand data of confidential investors. A new company entering in the stock exchange issue shares through IPO. So securities are traded trough initial public offerings. Secondary market: secondary market is the stock market where stocks are traded such as London Stock Exchange, New York Stock Exchange. In the secondary stock market, financial instruments are traded between the investors; there is no involvement of the companies. For example an investor purchases securities of Microsoft from another investor in the secondary market; here Microsoft is not involved in the transaction. Auction market and dealer market are two branches of secondary market. In auction market, institutions and individuals trade securities gathering in a single place and declaring the price at which they want to buy or sell securities. New York Stock Exchange (NYSE) is an example of auction market. In dealer market participants don’t need to be gathered in a place; here they joined by electronic networks. The dealer market is often called Over the Counter (OTC). So financial instrument are traded trough auction market or dealer market between individuals or institutions (Ifslearning.co.uk, 2015). Investors trade financial instruments for the purpose of dividend or capital gain. When one investor sell share at the same time another investor buys the share. In this case, secondary intermediaries help in trading the securities. So sellers even don’t know to whom the securities are sold (Inoue, 2006). Conclusions So in this report we see that the financial performance of Barclays Bank was good in earlier years like in 2009, 2010 but in later year 2012 its performance is very poor. Its ROE and ROA decreased severely. Finally in 2013 it started to increase its ROE and ROA due to its managerial efficiency and effectiveness. Interest rate risk, liquidity risk, currency exchange risk are the main obstacles of bank. So management body should properly measure the risk and should take necessary strategies to reduce risk. We find that a bank issue different financial instruments like share, bond, to collect capital from the market. There are different sorts of risk associated with the financial instruments. Bank management should apply appropriate hedging strategies to mitigate risk to ensure profitability. References Anon, (2015). [online] Available at: http://www.ftmanagement.com [Accessed 3 Jan. 2015]. Barclays.com, (2015). Barclays. [online] Available at: http://www.barclays.com/ [Accessed 6 Jan. 2015]. Berk, J. and DeMarzo, P. (2007). Corporate finance. Boston: Pearson Addison Wesley. Bessis, J. (2011). Risk Management in Banking. Hoboken: John Wiley & Sons. Choudhry, M. (2011). An introduction to banking. Chichester, U.K.: John Wiley & Sons. Francis, J. and Kim, D. (2013). Modern portfolio theory. Hoboken, N.J.: Wiley. http://www.accaglobal.com, A. (2015). Global body for professional accountants | Accountancy | ACCA | ACCA Global. [online] Accaglobal.com. Available at: http://www.accaglobal.com [Accessed 2 Jan. 2015]. Ifslearning.co.uk, (2015). Accounting and Finance Degrees - ifs University College. [online] Available at: http://www.ifslearning.co.uk [Accessed 9 Jan. 2015]. Inoue, T. (2006). Diversification of Stock Exchange Trading Platforms. Trading, 1(3), pp.65-72. Lee, C. and Hsieh, M. (2013). The impact of bank capital on profitability and risk in Asian banking. Journal of International Money and Finance, 32, pp.251-281. Pais, A. and Stork, P. (2011). Bank Size and Systemic Risk. European Financial Management, p.no-no. Pilbeam, K. (2010). Finance & financial markets. Basingstoke, Hampshire: Palgrave Macmillan. Rose, P. and Hudgins, S. (2008). Bank management & financial services. Boston: McGraw-Hill/Irwin. Saunders, A. and Cornett, M. (2011). Financial institutions management. Boston [u.a.]: McGraw-Hill. Wernz, J. (2014). Bank management and control. Heidelberg: Springer. Any QUIRY… Md. Hasan MBA (Accounting and Information Systems) University of Dhaka Email: [email protected] [email protected] Date: 1 July 2015 20 | Page