1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Mark Lin
Mark Lin
Articles (212) 

The Key Costs on a Bank's Income Statement (Banks 101 Series)

November 06, 2012 | About:

Certain industries by virtue of their unique characteristics have proven to be stumbling blocks for investors, who are used to reading the financial statements of a typical goods and/or service business. This is one of many in a series of articles where I reveal the nuts and bolts of investing in unique industries like banks etc.

The key costs on a bank's income statement include:

Interest Expense

- Interest paid on deposits and other borrowings.

Provision for loan losses

- Estimate of the quality of a bank's loan portfolios in terms of the quantum and likelihood of loan repayment on a timely basis. It works in a similar fashion to provision for doubtful debts for trade receivables.

Selling, General & Other Administrative Expenses and Other Operating Expenses

- Include staff expenses (wages, bonuses and other benefits), rental expense (occupancy of head office and branch offices) occupancy and depreciation on PCs and other IT systems.

About the author:

Mark Lin

Rating: 3.0/5 (4 votes)


Please leave your comment:

More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

User Generated Screeners

worldmetalsHow to Find Good Dividend Stoc
Roger9860ubnt peers
Bogdan BednarskiShares Buyback W1 2007
Bogdan BednarskiShares Buyback W1 2006
pbarker46Low short, low E10
quentin.picard10Y Rev Growth/ High ROE
melblannHigh Capital Returns and Mgn G
pe.leon90Portfolio Super Gurus
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)