Question

What does Provisioning Coverage Ratio (PCR) indicate?

A The profitability of the bank Correct Answer Incorrect Answer
B The extent of loan losses covered by provisions. Correct Answer Incorrect Answer
C The liquidity position of the bank Correct Answer Incorrect Answer
D The capital adequacy of the bank Correct Answer Incorrect Answer
E The credit quality of the bank's assets Correct Answer Incorrect Answer

Solution

Provisioning Coverage Ratio (PCR) is the ratio of provisioning to gross non-performing assets, which indicates the extent to which a bank has set aside funds to cover potential loan losses.

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