ProdigyInspired
Tafe Advocate
- Joined
- Oct 25, 2014
- Messages
- 643
- Gender
- Male
- HSC
- 2016
I'm currently doing a financial statement analysis on ICBC - a bank.
I found that most Chinese banks have low liquidity - low current ratios, I understand that this will allow the bank to rely less on core funding from shareholders and rather look to funding from more illiquid assets and investments. How is it still possible that these banks are still fairly successful even with low liquidity?
The same question goes for a high debt to equity ratio and a low return on owner's equity ratio.
I found that most Chinese banks have low liquidity - low current ratios, I understand that this will allow the bank to rely less on core funding from shareholders and rather look to funding from more illiquid assets and investments. How is it still possible that these banks are still fairly successful even with low liquidity?
The same question goes for a high debt to equity ratio and a low return on owner's equity ratio.