Banking Risk and Return

Acknowledgement

Writing this thesis has been very demanding, challenging and time-consuming, but also remarkable, informative and above all fun. Nevertheless, it feels great to have finally completed my bachelor's or master's thesis and I am now looking forward to a nice relaxing period for recovering. It has been both advantages and drawbacks with the limited amount of earlier research conducted within this area, even though I faced serious troubles but sometimes the advantages of this research luckily were in my favor and have made this research both challenging and interesting.

I would like to thank my supervisor -------, professor at -------University, who has been great in guiding my through this thesis, helping me through the difficulties I faced during the entire process and motivated me to work hard. Furthermore, I would like to thank all my friends, for their contributions by sharing their perceptions and opinions with me. Above all I would like to thank my family and teachers that provided me with valuable and constructive criticism.

Abstract

In newest years, the force to allow greater affiliation amid banks and other financial collections has intensified. Through regulatory estimates, banking groups have organised inroads into both securities and defence activities. The legislative proposals under anxiety in this gathering of the Congress would take item even more distant by shredding down competently all outstanding hurdles to financial integration. While the legislative deduction for this year extends uncertain, the drive is such that more distant economic integration is inevitable. The foremost deduction of this paper is that the bulk productive bank is in supplement highly ranked in time bounds of arrives back with rather lessened yardstick deviation and beta.

Table of Contents

Acknowledgementii

Abstractiii

Chapter 1: Introduction2

Background of the Study2

Problem of the Study3

Purpose of the Study4

Aims and Objectives of the Study6

Rationale of the Study7

Significance of the Study9

Research Questions of the Study9

Chapter 2: Literature Review11

Retail Banking11

The Evolution of Retail Banking15

Understanding the "Return to Retail"19

Perspective from the Banking Industry20

Increased Marketing Efficacy22

Previous Studies of Specialized Banks23

Specialized Micro-Lenders27

Liability Structure at Micro-Lenders30

Income and Expense30

Chapter 3: Methodology33

Research Method33

Literature Selection Criteria33

Search Technique34

Keywords Used34

Theoretical Framework34

Chapter 4: Results and Discussion36

Interest rate risk management using derivatives40

Profitability and Risk Based On Stock Returns47

Securities48

Chapter 5: Conclusion and Recommendation50

Conclusion50

Recommendation52

References55

Appendices61

Chapter 1: Introduction

Background of the Study

Diversification is wholeheartedly the simplest and probably the oldest approach to coordinating the trade-off between portfolio danger and return. Unless this arrives back on the supplies in the portfolio are faultlessly positively correlated, the danger of a diversified portfolio will be smaller diagram than the weighted signify of the hazards of the separate person assets. Because diversification tends to decline risk without a proportional decline in arrives back, a consuming bulk of economic banks have diversified portfolios (Phillips 2002 3).

A much minor diagram of banks have chosen to overlook the benefits of diversification and purpose on a exact asset or obligation wares for demonstration getting a hire of cards, residential or economic bona fide land parcel, enterprise recognise as accurate services, or tiny enterprise lending. These banks have organised a watchful strategic alternate to down turn diversification ...