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Question 13 Using the following financial information, prepare the balance sheet as at 31/12/19...

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Accounting

Question 13

  1. Using the following financial information, prepare the balance sheet as at 31/12/19 for High Street Bank Plc.

(10 marks)

High Street Bank Plc 31/12/19

Overdraft

5,000

Current Accounts

4,900

Loans

2,000

Savings Accounts

10,000

Credit Cards

1,200

Capital

1,000

Mortgages

6,000

Cash Reserves

1,500

Investments

200

  1. In relation to a bank, define the term risk-weighted assets (RWA).

(2 marks)

  1. Based on the following ratios, calculate the total RWA for High Street Bank Plc, and how much capital it will need under Basel III capital adequacy requirements of 10.5%

(8 marks)

Lending Products

m

Risk Weighting

Overdrafts

5,000

100%

Personal Loans

2,000

125%

Credit Cards

1,200

175%

Mortgages

6,000

50%

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