2.2 The criteria for evaluating the effectiveness of credit.
2.2.1 The criteria to assess the effectiveness of the bank credit.
In order to evaluate the effectiveness of internal credit in commercial banks, people use "factor net interest gap "(NIM = net interest Margin) is the ratio of net interest income or the assets yielding assets. the formula specified criteria directly related primarily to fertility words of the credit operations is net interest income and productive assets. Of which net interest income factors of productive assets vital role. In addition, to fully evaluate the effectiveness of credit in the financial year, we also factor into account: In short, the ability profitability of the loan and investment depends on the cost of loans, investments, credit losses, and interest rates applied. in addition to the indicators to assess the effectiveness of credit in the financial year above it is also used in a number of other criteria when considering the activities in a process of many years to the time of the study, namely: analysis of the situation for more overdue credit quality , the possibility of risk, business efficiency of credit institutions, which have corrective measures in the future. Debt is classified losses = Debt removed from the policy of the Government these are indicators the effect of bank credit to the bank. Operational efficiency by bringing credit to offset the cost of lending, credit risk, profitable not only to ensure life for the workers and employees, constantly enhancing the facilities and technical , media, customer service work towards more modern, duties and obligations to the State, but also to increase accumulated capital.
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