Commercial Bank Profitability and Risk Evaluation

1. ANZ and a Comparable Foreign Commercial Bank (a) Identify the key features of ANZ. For example, market share, size products, services, and so on. (b) Select a comparable foreign commercial bank. Explain why you made such selection by identifying the similarities and differences between ANZ and the foreign bank. 2. Profitability Analysis (a) Compare ANZ's profitability with the selected foreign bank over the last 5 years (i.e., 2013 to 2017). What are the factors drive the change in ANZ's profitability over time? What are the factors drive the difference between the profitability of ANZ and that of the selected foreign bank over time? (b) Based on your research, what is your expectation about ANZ's profitability over the next 3 years? Note: For profitability analysis, see Section 3-2 of the prescribed textbook. 3. Risk Analysis (a) Compare ANZ's risk with the selected foreign bank over the last 5 years (i.e., 2013 to 2017). Students should analyse ANZ's credit risk, liquidity risk, and market risk. What are the factors drive the change in ANZ's risk over time? What are the factors drive the difference between the risk of ANZ and that of the selected foreign bank over time? (b) Based on your research, what is your expectation for ANZ's risk over the next 3 years? 2 Note: For risk analysis, see Section 3-3 of the prescribed textbook. Hints: (a) Students are not required to include all (or only use) ratios from Section 3-3 of prescribed textbook. (b) Students should collect information from annual reports or ORBIS. Then, select, calculate (i.e., show calculations in excel), compare, and interpret the financial ratios. (c) Directly download the ratios from ORBIS is not acceptable. For example, to calculate ROE (i.e., ROE = net income / average total equity), you need to download the net income from income statement and the equity from balance sheet, then show the ROE calculation in excel. No mark will be awarded for ROE calculation if it is directly downloaded from ORBIS. (d) Use graphs, tables, and figures to support your arguments. (e) Use information from various additional sources to support your arguments as long as the source is appropriately referenced. For example, academic journal articles, media announcements, and regulation discussions.      

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