Asset Liability

RESEARCH PROPOSAL

INTRODUCTION

A bank’s profitability is of utmost concern in the modern economy, commercial banks are in the business of receiving deposits (liabilities) and to issue debt securities on one hand and create or invest in assets on the other hand during these transactions banks incur costs for their liabilities and earn income from their assets. Thus profitability of banks is directly affected by management of their assets and liabilities.

BACKGROUND TO THE STUDY

the instability of the financial sector and the fact that it keeps upgrading to keep up with the demand for better products and services by clients ,puts operators in the industry under considerable pressure to improve upon their profit margins by finding effective strategies for managing their asset and liability portfolios. An efficient asset –liability management deals with the optimal investment of assets in view of meeting current goals of future liabilities, maximising firms profit as well as controlling and lowering various risks.

The rewards from such improvements in the asset liability management techniques will spread across firm, industry and economic levels. At the national level for example the financial services sector is of central importance to the overall Zimbabwean economy as it influences, directs and engineer growth. The sector provides market, liquidity, reduces transaction costs, provide investment opportunities and ensure competition in economic activities.

This study will seek to examine some best practices in the management of assets and liabilities sof the Zimbabwean economy and culture.

PROBLEM STATEMENT

The landscape of Asset –Liability Management for the financial sector is ever changing. Various academic and practicing financial professionals have even questioned the strengths of the traditional methods of identifying, measuring and managing risk. Several attempts have been and continue to be in the area of exploring up to date risk...