Question

A bank has interest income to total assets ratio of 5.45 percent and has noninterest income of $45 million and total assets of $700 million. What is the bank's asset utilization ratio?

Answer 1

Answer:

11.88%

Explanation:

The computation of the bank's asset utilization ratio is shown below:

= Total Revenues ÷ total assets

where,

The Total revenue is computed below:

= Total assets ×  total assets ratio + non interest income

= $700 million × 5.45% + $45 million

= $38.15 million + $45 million

= $83.15 million

And, the total assets is $700 million

Now put these values to the above formula  

So, the ratio would equal to

= $83.15 million ÷ $700 million

= 11.88%