What is Provision Coverage Ratio (PCR)? The Provision Coverage Ratio (PCR) is a vital financial metric used by banks to assess the quality of their loan portfolios. PCR measures the extent to which a bank has made provisions to cover its non-performing assets (NPAs). Essentially, it indicates how well a bank can absorb losses from…
Author: Tech Writer
Net Non-Performing Assets (NNPA) Ratio in Banking: Definition, Calculation & Example
What is the NNPA Ratio? The Net Non-Performing Assets (NNPA) Ratio is a key metric used to assess a bank’s asset quality. Unlike the GNPA ratio, which measures the total non-performing assets, the NNPA ratio accounts for the bank’s provisioning against bad loans. This ratio gives investors a clearer picture of the bank’s actual credit…
Gross Non-Performing Assets (GNPA) Ratio in Banking: Understanding Its Importance, Calculation & Example
What is the GNPA Ratio? The Gross Non-Performing Assets (GNPA) Ratio is a key indicator of a bank’s asset quality. It measures the percentage of loans and advances that have turned into non-performing assets (NPAs) relative to the total loans disbursed by the bank. A high GNPA ratio signals deteriorating asset quality, while a low…
Cost to Income Ratio in Banking: A Key Efficiency Metric
What is Cost to Income Ratio? The Cost to Income Ratio (CIR) is a crucial financial metric that measures a bank’s operational efficiency. It compares the bank’s operating expenses to its net income, helping investors assess how well a bank controls costs relative to its earnings. A lower CIR indicates better efficiency, while a higher…
Return on Equity (ROE) in Banking: A Key Profitability Metric
What is Return on Equity (ROE)? Return on Equity (ROE) is a crucial financial ratio that measures how efficiently a bank generates profit from its shareholders’ equity. It helps investors assess how well a bank is using its capital to create value. A higher ROE indicates strong financial performance and effective capital utilization, while a…
Return on Assets (ROA) in Banking: A Key Profitability Metric
What is Return on Assets (ROA)? Return on Assets (ROA) is a crucial financial ratio that measures how efficiently a bank or financial institution generates profit from its total assets. It helps investors and analysts evaluate how well a bank is utilizing its resources to create earnings. A higher ROA indicates strong financial performance, while…
Net Interest Margin (NIM) in Banking: A Key Profitability Metric
What is Net Interest Margin (NIM)? Net Interest Margin (NIM) is a key profitability metric used in the banking sector. It measures the difference between the interest banks earn on loans and the interest they pay on deposits, relative to their total earning assets. A higher NIM indicates that a bank is efficiently managing its…
How U.S. Inflation Impacts Interest Rates: A Simple Guide
Introduction Inflation and interest rates are two key economic indicators that shape financial markets and personal finances. But how are they connected? This guide explains the relationship between U.S. inflation rates and interest rate decisions by the Federal Reserve in a simple and easy-to-understand way. What Is Inflation? Inflation refers to the increase in prices…
Why Do U.S. Bond Yields Fall When Interest Rates Drop?
If you’re new to finance, you might have heard that when interest rates fall, U.S. bond yields become less attractive. But what does that really mean? Let’s break it down in simple terms. What Are Bond Yields? A bond is like a loan—you lend money to the government or a company, and they promise to…
Understanding SDP (Session Description Protocol) in WebRTC
Introduction When two people communicate over a video or voice call using WebRTC, they need to exchange details about how the connection should work. This is where Session Description Protocol (SDP) comes into play. SDP is a format used to describe multimedia sessions, helping peers agree on audio/video formats, codecs, network information, and other communication…