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13WBD02114
13WBD00976
TUTORIAL GROUP
: DBF G9
NAME OF TUTOR
DAY
: TUESDAY
DATE OF SUBMISSION
: 21.07.2014
TABLE OF CONTENT
NO.
1.
2.
3.
4.
5.
6.
TITLE
Cover
Table of content
Assessment Criteria For Coursework
Group Member Appraisal Form
Plagiarism Statement
1. Discuss whether banks generated more non-interest based income than
interest based income from the bank activities from 2000 to 2015.
PAGE
1
2
3
4-9
10
11-12
7.
13
8.
9.
10.
11.
12.
Appendix
Reference
14-17
18-24
24-25
26-28
29-30
Maximum
Marks
20
20
20
20
Marks
Allocated
Remarks
The basis of this evaluation is your group members commitment to completing the assignment
and to their regard for other members of the group. It should be based on the contribution given
by each member and his or her involvement in this assignment.
Group members should be appraised using the following basis:
100%
50%
0%
Group member attended all group meetings or if unable to attend, contacted the
group in advance and came to an alternative arrangement that the majority of group
members were happy with.
50%
50%
50%
50%
50%
0%
0%
0%
0%
0%
Note:
Failure to submit a Group member appraisal Form will result in a zero appraisal being recorded
against your name.
The basis of this evaluation is your group members commitment to completing the assignment
and to their regard for other members of the group. It should be based on the contribution given
by each member and his or her involvement in this assignment.
Group members should be appraised using the following basis:
100%
50%
0%
Group member attended all group meetings or if unable to attend, contacted the
group in advance and came to an alternative arrangement that the majority of group
members were happy with.
50%
50%
50%
50%
50%
0%
0%
0%
0%
0%
Note:
Failure to submit a Group member appraisal Form will result in a zero appraisal being recorded
against your name.
The basis of this evaluation is your group members commitment to completing the assignment
and to their regard for other members of the group. It should be based on the contribution given
by each member and his or her involvement in this assignment.
Group members should be appraised using the following basis:
100%
50%
0%
Group member attended all group meetings or if unable to attend, contacted the
group in advance and came to an alternative arrangement that the majority of group
members were happy with.
50%
50%
50%
50%
50%
0%
0%
0%
0%
0%
Note:
Failure to submit a Group member appraisal Form will result in a zero appraisal being recorded
against your name.
Registration. No.
Signature
13WBD02114
...
13WBD00976
...
...
Programme
Tutorial Group
Group 9
Date
21 July 2014
Discuss whether banks generated more non-interest based income than interest
based income from the bank activities from 2000 to 2015.
Standard Chartered (Malaysia)
RM ('000)
YEAR
INTEREST BASED INCOME
NON-INTEREST BASED INCOME
2000
914,731
205735
2001
1078,532
557994
2002
1141,043
252397
2003
1,201,133
789032
2004
1,309,683
536876
2005
2,080,936
1174427
2006
2,411,860
450059
2007
2,882,081
439100
2008
3,064,785
501067
2009
2,937,002
511537
2010
2,592,586
506979
2011
2,952,529
689468
2012
5,493,832
882199
2013
5,609,243
1222457
2014
5,667,175
1070304
RM(00
0)
YEA
R
Singapore UOB
RM
(000)
YEA
R
From the UOB Banks analysis, the interest based income is increasing gradually from
year 2000 to 2014, because of the growth of loan and improved loan pricing in an
increasing interest rate environment of UOB Bank.
Besides that, for the non-interest income, it increases from year 2000 with RM1704000
and reached the highest level of RM2127000 in 2006 but then start to have a decline in
year 2006 to year 2008, which are RM1675000. After that it drops a lot from year 2009 to
2010, RM1732000 to RM811000 due to decline in fee income. And later in the following
years, the flow of non-interest income is more stable and steady, mainly contributed by
steady fee income and higher trading and investment gains. This also represents a
relatively faster recovery for UOB Bank.
So, we found that the bank generated more interest based income than non-interest based
income for UOB Bank.
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
140000
120000
100000
80000
60000
40000
20000
0
INTEREST BASED
INCOME
NON-INTEREST BASED
INCOME
Besides that, for the non-interest income, it increases steadily from 2001 to 2013, due to
increase in fee & service income, income from subsidiaries and gains on investment.
So, we found that Siam Commercial Banks interest income is more than the non-interest
income.
3,000.00
2,500.00
KRW (in
Billions)
2,000.00
1,500.00
1,000.00
NON-INTEREST BASED
INCOME
500.00
0.00
CONCLUSION
In conclusion, five banks in different country are generated more interest based income
than non-interest based income. The interest income is roughly twice the rate of noninterest income. The main received of interest income is from earning on deposits at
banks and credit unions, on money market funds, on bonds, and on loans.
However, from the analysis we can found that most of the banks (Malaysia, Thailand, and
Australia) were well into millions of dollars from non-interest income in recent years,
which indicates the non-interest income is growing. Nowadays, non-interest income is
very important for bank to move from old traditional interest income into a major
contributor of bank revenue. These sources of income have a great growth and significant
in non-interest income.
Discuss whether the impact of macro and regional economic effects on banks noninterest based activities such as BASEL rules and regulation.
Non-interest incomes (also referred as fee income) for a bank are mainly income
from service charges on account they hold and interest charged for the loan they granted.
Unlike the interest income, this income is basically unaffected by regional economic and
financial market cycles and is usually not controlled by rules and regulation. Non-interest
income is less likely to move in synch with economic variables such as interest rates or gross
domestic product (GDP)
REFERENCE
1. Investopedia, 2015, Net Interest Income, viewed 18 July 2015. Available from
http://www.investopedia.com/terms/n/net-interest-income.asp
2. Investopedia, 2015, Non-Interest Income, viewed 18 July 2015. Available from
http://www.investopedia.com/terms/n/noninterest-income.asp
3. William Perez, 2015, Interest Income, viewed 19 July 2015. Available from
http://taxes.about.com/od/income/qt/interest_income.htm
4. wiseGEEK, 2015, What is a Non-Interest Income, viewed 19 July 2015. Available
from http://www.wisegeek.com/what-is-a-non-interest-income.htm
5. Wintersteen, 2007, Developed vs. Developing Countries, viewed 19 July 2014.
Available from http://www.slideshare.net/wintersteen/developed-vs-developing-countries
6. The Wall Street Journal, 2015, Malaysia: Standard Chartered Annual Income
Statement, viewed 19 July 2015. Available from
http://quotes.wsj.com/UK/XLON/STAN
7. MarketWatch, 2015, HSBC Annual Income Statement, viewed 19 July 2015. Available
from http://www.marketwatch.com/investing/stock/uovef/financials/cashflow11
8. Hana Bank (Korea), 2015, Financial Information, viewed 19 July 2015. Available
from http://www.hanafn.com/eng/ir/financial/statements/balanceDetail.do