1. Pour personnaliser l’image: Supprimer le visuel existant Insertion / Image / À partir d’un fichier Disposer votre image en arrière plan Saisir la classification sur la page CITIZEN ACT - season 2011-2012 Basic Banking Knowledge CITIZEN ACT – SEASON 2011-2012

6. What are Banks for? Households Businesses with a surplus cash flow Institutional investors: Insurances, pension funds, private health insurance, asset management bodies… Households Businesses in need of finance The government (financing its deficits) Banks themselves Banks are the link Those who have liquid assets Those who need liquid assets Guarantees the circulation of liquid assets

7. What are Banks for? Transforming deposits into loans The bank collects resources from its customers ( short term deposits ) It transforms these deposits into medium and long term loans Hence the need to respect the liquidity ratio , in order to be able to pay RISQ NB liquidity ratio = relation between liquid and mobilisable assets and short term commitments This ratio must always be above 100%.

11. Gross Operating Profit Operating Profit Place these elements and explain how they are calculated Charges Products = Net Banking Income (NBI) HOW DOES A BANK OPERATE ?

12. Interests paid Commission paid Other Overheads (salaries, depreciation, taxes, other) Gross Operating Profit Cost of risk Operating Profit Interest received Bank commission received Financial commission received Other Let’s discover a simplified profit and loss account Charges Products = Net Banking Income (NBI) NB: NBI= products-charges Gross Operating Profit= NBI– Overheads Operating profit= Gross operating profit – cost of risk Operating ratio = overheads/ NBI HOW DOES A BANK OPERATE ?

14. Different types of risq must be managed into a financial institution. In the following slides, we will discover and define them. RISK MANAGEMENT