MANAGING LIQUIDITY, PROFITABILITY , SAFETY,

SOLVENCY IN MFBS

Dr. Sam Owokoniran

Strategic learning Points.

Strategy

Liquidity Profitability

Safety Solvency
Conceptual clarification
LIQUIDITY

SOLVENCY PROFITABILITY

SAFETY
Liquidity.

Liquidity to banking is the degree

and level of cash and cash
equivalence that is available for the
business.

Liquidity describes the degree to

which an asset can be quickly bought

Liquidity
or sold in the market at a price
reflecting its intrinsic value.

Liquidity help the bank to finance its

assets to cover its short-term.

The current ratio is the simplest and

least strict.

In a simplex form liquidity may refer

to cash that is available for the
business.
PROFITABILITY
PROFITABILIT
In business In banking
Y
Interest income
The level of income that a Fees
business or a company is
generating Charges
Other income

The degree to which a

Bottom-line and margins business or activity yields
profit or financial gain:

Net income after Tax and

Gross income OPEX.
SAFETY.
The level of assurance for
sustainability.

The security of all classes of asset

Enterprise Risk Management
in the bank and the assurance s
framework.
that these assets will continue to
produce expected value .

The degree of business

continuity and going
concern
Solvency.

Solvency can be an important measure of

financial health, since it's one way of
demonstrating a company’s ability to
manage its operations into the foreseeable
future.

Solvency represents a company’s ability to

meet all of its financial obligations

Solvency will show the capacity of a bank

to meet both short term obligations and
long term obligations.
How to keep the bank liquid and solvent .

Ensure that the bank is well

capitalized . Capital adequacy .

Develop a robust customer

Still to all regulatory provision
acquisition strategies and
on liquidity management ands
effective business
assets management .
development game.

Develop product programmes

Establish a robust treasury and
that meets the needs of the
asset management
market with capacity to
department with well
generate deposits liabilities on
experienced professionals .
a continuous basis.
Have a contingency liquidity
Avoid risks that have the Avoid bad loans and reduce
planning to respond to
capacity to erode the liquidity provisioning to acceptable
possible liquidity shortages
of the bank. threshold.
and funding gaps.
How to keep the bank profitable.

Increase business
level

Develop strategic cost

management and
efficiency.

Create quality risk Develop risk base

asset portfolio. internal control to Develop creative
prevent income business and income.
( PAR of less than 2) leakages and frauds.
How to keep the bank safe.
Get leadership and
corporate governance
right

Run the bank

Develop a business ethically and in line
continuity plan with industry and
global practice.

Comply to Anti
Develop a Enterprise
Ensure full compliant money laundering
Risk Management
to regulations . conventions and
Framework.
provisions
The driver of a good bank.

Low cost deposit

Quality and productive

risk asset portfolio.

Progressive and positive

margin

positive and adequate

cash flow
Memory lane.

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Thank You