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Resources » Finance/Investments » Banking »
Loans and credits - Loans, Receivable accounts, Discounting effects and Investment securities
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Loans and credits:
Loans:
You can develop multiple classifications on loans:
* The nature of the property provided: money (which we will focus on this topic), consumables and furniture things loan securities.
* For the purpose of the loan currency In domestic or foreign currency.
* For the interest rate: A fixed and variable prepaid or postpagables.
* For the system of repayment, at the end of the loan, according to a French, German, American ...
* For the existence of guarantees of compliance with obligations can be real (pledges, mortgages, deposits ...) or personal (guarantee).
* Syndicated loan in that the funds disbursed to the borrower come from multiple lenders (union), but this plurality does not mean there are several lenders, from a legal point of view is a single contract.
* Shareholder loan where the lender, regardless of the covenant of interest, the borrower agrees to share in net profit it obtains.
* Loan spot trading in connection with a transaction to buy or sell securities.
Receivable accounts:
Receivable accounts that are operations by which the Bank grants credit to customers (accredited) by a certain time, (you can set your automatic extension) and up to a specified amount available to the client. The customer is required to satisfy the committee to open a bank to repay the Bank the balance in their favor, resulting in the credit account at the time of the cancellation and payment of the same and to pay interest on the amounts provided, and some minor for amounts not ready.
Discounting effects:
The effects of discount as a way of financing a business and which consists of a transaction by which a bank anticipates a person the amount of a monetary claim it has against a third party, net of interest or a change in the percentage and assignment except success.
Investment securities:
The second part of the profitable assets consists of the securities portfolio which is distinguished by a debt both public and private equities and on the other.
Temporary transfers of assets:
A third type of operation carried out by the bank would be the temporary transfer of assets, is a mode in which the credit institutions to give a customer a portion of an asset (eg a loan) of your property, enabling them to recover a proportion of one third of it in exchange for a performance.
In short, the basic problem of a bank is to achieve maximum profitability, but at the same time ensure sufficient liquidity and restrictions to minimize the risk by ensuring their solvency. The solvent should also be ensured with own resources (capital and reserves) sufficient to enable it to deal with potential risks arising from the insolvency of their debtors.
Net interest
Knowing that banks pay a sum of money to individuals or organizations who place their resources at the bank (interest collection) and they charge for lending money to those who request them (interest placement), the question of where a bank obtains their profits. The answer is that interest rates of placement in most countries, are higher than the interests of abstraction, so that banks charge more to provide resources to pay for that capture. The difference between the interest rate of placement and recruitment is called net interest. Banks, therefore, earn more profits the larger the margin of intermediation.
Placement rate of interest - interest rate of uptake = net interest.
The banks act as intermediaries. Your business is trading with money like any other good or commodity.
Servicing:
* Currently, the change in the needs of businesses, families and institutions, has brought the focus to banking services, which become their main source of revenue for the reduction of net interest, the more pronounced reduction mature is the country's financial system and the lower interest rates. The means of payment (cards, checks, transfers), to ensure the success of international trade between the parties, ensuring the soundness import-export, brokering and financial markets transactions with large companies and public institutions, make the approach to banking as a universal financial services companies. Special mention deserve the significant holdings of the great banking business, another big source of business and power to these institutions, to form powerful multinational groups with interests in diverse areas.
* Depending on the laws of the countries, banks may perform functions additional to those mentioned above, such actions negotiate, government bonds, currencies of other countries etc.. When these activities are performed by a single bank is called universal bank or banks. Likewise, these activities can be conducted separately by banks specialize in one or more activities in particular. This is called banking specialist.
Independent of the types of banks, they make the money that circulates in the economy, the money that some people or organizations may have available to other who do not and that request. In this way facilitates the activities of these organizations and individuals and improves the performance of the economy in general. It inferred the importance of banking in the economic history of mankind.
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