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Treasury MGT Assignment 2022

The document provides instructions for a group assignment to analyze financial data for Mabibo Commercial Bank Plc and advise a customer whether to invest in its shares. Students are asked to: 1) Evaluate whether the bank achieved its management's objectives over three years. 2) Calculate the intrinsic share price and advise on investing. 3) Analyze the bank's profitability by calculating metrics like net interest margin. 4) Analyze the bank's liquidity over three years. The assignment is due on May 19th and should be submitted electronically and as a hard copy. Financial data including assets, income, expenses, shares outstanding, and objectives are provided for

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Abdulkarim Hamisi Kufakunoga
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219 views3 pages

Treasury MGT Assignment 2022

The document provides instructions for a group assignment to analyze financial data for Mabibo Commercial Bank Plc and advise a customer whether to invest in its shares. Students are asked to: 1) Evaluate whether the bank achieved its management's objectives over three years. 2) Calculate the intrinsic share price and advise on investing. 3) Analyze the bank's profitability by calculating metrics like net interest margin. 4) Analyze the bank's liquidity over three years. The assignment is due on May 19th and should be submitted electronically and as a hard copy. Financial data including assets, income, expenses, shares outstanding, and objectives are provided for

Uploaded by

Abdulkarim Hamisi Kufakunoga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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THE INSTITUTE OF FINANCE MANAGEMENT

INSTITUTE OF FINANCE MANAGEMENT CHUO CHA USIMAMIZI WA FEDHA

FACULTY OF ACCOUNTING, FINANCE AND BANKING

AFU 08609

TREASURY MANAGEMENT

BBF 3 & BACC 3

2021/2022

Coursework Assignment

INSTRUCTIONS:

1. There is ONE QUESTION in this assignment. Respond adequately to the


requirements.

2. The assignment is a GROUP ASSIGNMENT. Each group should not have more
than 10 members.

The deadline for submission of this assignment is 19 th May 2022. The assignment should be
submitted both in soft and hardcopy.
Email address:[email protected]
[email protected]

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ASSIGNMENT QUESTION

MABIBO COMMERCIAL BANK PLC


You are an independent financial analyst working with the Dar es Salaam Stock Exchange.
You are to advise a customer whether to invest in shares of Mabibo Commercial Bank Plc.
The shares are currently trading at TZS670. Data extracted from the most recent published
financial statements are as summarized below:

FINANCIAL YEAR
ITEM Billions of Tanzanian Shillings
2021 2020 2019
Total Interest Income 30 20 10
Total Interest Expense 15 11 8
Non Interest Income 7 6 5
Non Interest Expense 5 4 2
Provision for Loan and Lease Losses 1 1 1
Total Operating Revenue 25 15 5
Total Operating Expense 20 10 4
Net Income 3 2 1

Total Assets 20 18 15
Total Earning Assets 18 15 12
Total Interest Bearing Liabilities 13 10 8
Total Equity Capital 10 10 10
Cash Assets and Government Securities 2 1.5 1.0
Cash & Due from Balances held at other Banks 1 0.5 0.3

No. of Common Equity Shares Outstanding 3,000,000 3,000,000 3,000,000

ADDITIONAL INFORMATION

Objectives Set by the Management


 Objective No.1: Return on Equity (ROE) – Not Less than 15%
 Objective No. 2: Earnings per Share (EPS) – Not Less than TZS250 per Share
 Objective No. 3: Overall Risk as measured by the Standard Deviation of Net Income
– Not more than 1%

Investors require a return of 15% on similar stock.

A Dividend of TZS20 per share has just been paid. Dividends are expected to grow at a
constant rate of 5% per annum

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REQUIREMENTS

1. Evaluate whether over the three years Mabibo Commercial Bank Plc has been able to
achieve the objectives its management has set. (25 Marks)

2. Calculate the intrinsic share price of Mabibo Commercial Bank Plc and advise a
prospective investor whether to invest in a share of Mabibo Commercial Bank Plc.
(25 Marks)

3. Analyse and comment on Mabibo Bank’s Profitability over the three years. [Hint:
Calculate the Net Interest Margin, Return on Assets, Net Operating Margin, Equity
Multiplier and Net noninterest margin. (25 Marks)

4. Analyse and comment on Mabibo Bank’s Liquidity over the three years. (25 Marks)

[TOTAL = 100]

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