Glossary and Abbreviations
- Glossary
- Abbreviations
| Ratio | Basis of computation |
|---|---|
| Average cost of deposits (i) |
Interest expense Average deposit (i.e. opening + closing balance)/2 |
| Basic earnings per share |
Profit attributable to ordinary shareholders (after deduction of debenture interest and tax) Weighted average no of shares in issue |
| Cost to income ratio (1) |
Total cost (interest expense, operating cost before loan loss expense) Gross earning |
| Cost to income ratio (2) |
Total overhead cost (operating cost including loan loss expense) Total net revenue |
| Cost of interest bearing liabilities |
Interest expense Average interest bearing liabilities (opening + closing balances)/2 |
| Cost of risk |
Loan loss expense Average loans |
| Gross loans | Aggregate loan position |
| Leverage ratio |
Total debt capital
Total shareholders' fund x100
|
| Liquidity ratio |
Liquid assets Deposit liabilities (as prescribed by the CBN) |
| Loan to deposit ratio |
Total loans Total deposit |
| Marginal cost of fund |
Increase in interest expense during the month Increase in average deposits during the same month (annualised) |
| Net interest margin (1) |
Net interest income Average interest-earning assets (i.e. Opening + Closing) |
| Net interest margin (2) |
Net interest income Total interest income |
| Net loans | Gross loans – loan loss provision |
| Net revenue from funds | Interest income – (interest expense + loan expense) |
| NPL ratio |
Non-performing loans Gross loans |
| Operating profit | Profit before taxation (PBT) |
| Operating profit margin |
Operating profit Gross earnings |
| Provisioning level |
Total provision Total NPL |
| Return on average assets |
PAT Total assets |
| Return on equity |
PAT
Shareholders' fund x100
|
| Risk asset ratio |
Total loans Total assets |
| Risk-weighted assets | Assets x weight of risks |
| Tier 1 ratio |
Total tier 1 capital
Risk weighted assets x100
|
| Tier 2 ratio |
Total tier 2 capital
Risk weighted assets x100
|
| Total capital adequacy ratio (ii) |
Total qualifying capital
Risk weighted assets x100
|
| Yield on interest earning assets |
Interest income Average interest earning assets |
Total Qualifying Capital
Total qualifying capital is tier 1 capital less goodwill, other intangible assets and deferred losses, plus tier 2 capital less investments in unconsolidated subsidiaries and associates.
Tier 1 capital
- Ordinary shares
- Share premium
- General reserves
- Reserve for small scale industries
- Other reserves
- Retained profit and loss
- Audited profit approved by CBN
Tier 2 capital
- Fixed asset revaluation reserves
- Forex revaluation reserves
- General provisions
- Minority interest
- Hybrid capital instrument
- Preference shares
- Debenture stock