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)

Comments

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


akcapitalSmall Cap - Payout Yield
Funnyman1Cash Flow
brettHigh Quality
kw1123S&P Consistent Growth
musselmantbob
pbarker46Low 3 Hist Values
pbarker46Hist. Low Shiller PE
pbarker46Hist. Low PS
pbarker46Hist. Low PB
pbarker46Begin here
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)
FEEDBACK