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MariettaO [177]
3 years ago
7

A bank has an allowance for loan loss of $4.5m at the beginning of the year and $4.2m at the end of the year, non performing loa

ns of $6.2m at the beginning of the year and $5.8m at the end of the year, and has net charge offs of $2.7m in bad loans. what was the bank’s provision for loan loss for the year?
Business
1 answer:
Marrrta [24]3 years ago
7 0

Answer:

0.259

Explanation:

difference in loan loss allowance in the year= 4.5-4.2= 0.3m

difference in non performing loans in the year= 6.2-5.8= 0.4m

Provision for loan loss= (difference in loan loss allowance + difference in non performing loans)/ net charge offs

provision for loan loss= (0.3+0.4)/2.7=0.259

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