FIN 320: Personal Finance Course

BANKING
ASSIGNMENT

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By student name
Professor
University
Date: 25 April 2018.
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BANKING
ASSIGNMENT

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Contents
Introduction................................................................................................................................................................................................................. 3
Summary and Procedure.............................................................................................................................................................................................3
Conclusion................................................................................................................................................................................................................... 7
References................................................................................................................................................................................................................... 8
Appendix...................................................................................................................................................................................................................... 9
Income Statement...................................................................................................................................................................................................9
Balance Sheet........................................................................................................................................................................................................ 10
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Introduction
A brief report has been prepared on the First Abu Dhabi Bank and the net income of the last 10 years has been considered to
calculate the growth and cost of equity of the company. Stock pricing has been done using two known methods, the calculation for
which has been shown below. The sensitivity analysis has also been done to find out what would be the changes in the stock price in
case the cost of equity and the growth of the company is being changed by 0.1%. The results of all such 10 scenarios each has been
shown through the table[ CITATION Hem17 \l 1033 ].
Summary and Procedure
The extracts of the consolidated balance sheet and the income statement shown in the appendices have been taken from the annual
report of the company “First Abu Dhabi Bank” of the respective years from 2007 to 2017. Over the period of time, the reporting
requirements have changed and there have been introduction of new ways of reporting in the balance sheet and profit and loss
account but in the above consolidation, due care has been taken so as to ensure the uniformity of the different heads and
accounts[ CITATION Ale16 \l 1033 ]. This will help in comparability of the financial statements over the years. From the income
statement, we can see from the net interest income has increased over the years, however the rate of increase has slowed in the
past 2-3 years. Similarly, the net income from Islamic financing contracts have also increased over the years[ CITATION Cho18 \l 1033 ].
From the consolidated statement of financial position, it can be seen that the overall assets have almost increased 4 times from 139
billion in 2007 to 668 billion to 2017. The cash reserves of the company have grown considerably during this period, similarly, the
loans and advances given by the bank and the non-trading investments have also increased during this period[ CITATION Bro16 \l 1033
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