The full functioning of an average company is possible if it has additional and permanent sources of financing. The enterprise can use both its own resources and attract financial resources from credit institutions. For example, a head of a firm or an entrepreneur can apply to a bank for the purpose of formalizing consumer loan or commercial loan.
Interest rates are determined by each client individually. At the same time, the choice the best option may be difficult due to differences in different banks. For this reason, the weighted average interest rate on loans is used. The term definition method and formulas for its calculation are standardized and applied in all banks.
Weighted average interest rates on granted loans are formed depending on the level of their use. Index financial enterprise is defined as the total cost of previously issued and received loans. Simply put, this term refers to the average price loan portfolio. The indicator is considered within the company in order to analyze the effectiveness of its activities.
Within the overall banking system the term refers to the total cost of all loans in all banks in the country. The success and efficiency of the banking system is determined on the basis of an indicator of this level. weighted average interest rate can also be used as a criterion for assessing the progress dynamics credit policy.
The weighted average interest rate of the Central Bank of the Russian Federation on loans is calculated in without fail, which is due to the need to analyze the company's activities. The required calculations cannot be performed using simple indicators characterizing the lending procedure. For this reason, experts take into account the various categories of loans issued by banks when making calculations.
In particular, the following types of loans apply:
It should be noted that the weighted average interest rate of the Central Bank of the Russian Federation is calculated for individuals and companies. Both indicators are publicly available: for example, last year the indicator was 15% per annum.
To assess the liquidity of a credit institution, it is necessary to know what is included in their assets. Under the assets of the bank means the resources owned by the organization. The Company may dispose of them at its own discretion.
Bank assets include:
unnecessarily liquid bank, which falls out of equilibrium, begins to lose its profit, since available funds you can put it into circulation and start receiving a percentage of the profit from them, but during the time period that the money was in the account, they lay as a useless load, and did not work.
Commercial financial institutions in Russia regulate their own liquidity by attracting third-party resources or placing the excess of their funds outside the bank. The resources of commercial banks are:
An excessively liquid commercial financial institution may issue interbank loans to other structures with less liquidity. On the contrary, when there is a lack of liquidity, commercial banks resort to interbank lending in order to attract resources.
The weighted average interest rates of interbank loans directly depend on the balance of demand and supply of finance in the market. At the same time, interbank lending operations affect the cost of loans for individuals and the efficiency of financial institutions.
For this reason, volumes credit operations in the credit market are regularly monitored and regulated central bank Russian Federation. He carefully adjusts interest rates on loans.
A timely and adequate reaction of the Central Bank of Russia to changes in liquidity in the banking system of the state and the cost of national resources is possible only with the regular and correct calculation of indicators of the weighted average interest rate affecting interbank credit institutions.
The parameter of the weighted average interest rate for loans to individuals and companies is calculated using a special formula. The definition of the standard average differs from the interest rate calculation scheme: the loan amount plays a significant role in it. The formula for the calculation is as follows:
ATP \u003d ∑ (K * P) / ∑ K, where:
A practical example will help you understand the correct order of calculations. You can take three loans with different parameters:
The calculations made using the above formula allow us to say that the value of the weighted average interest rate is about 10%. Interest rates for foreign currency loans are determined in a similar way, however, when calculating them, the main exchange rate is taken into account Central Bank RF.
Maximum effective use involved financial resources possible at the lowest weighted average interest rate. To keep it at a low level, you must follow a few rules:
Within a single enterprise, the weighted average interest rates on loans should be strictly controlled. This strategy allows you to appropriately distribute the company's resources and maintain the efficiency of its activities.
A similar rule applies to the amount of credit resources in the country, since the efficiency financial system state directly depends on the weighted average rate. The Central Bank is responsible for tracking and adjusting the rate.
The procedure for calculating the weighted average is quite simple. To do this, it is desirable to know the basic criteria for loan products and be able to use a special formula.
– a characteristic that reflects the average interest rate on loans that are issued within the same company. What is this indicator for?For accurate information regarding total cost all loans. This value is based on the volume of loans granted and their terms.
Many mistakenly believe that the rate is calculated according to the formula:
Iav.vz. = (X1+X2+X3+Xn)/n,
where Х1, Х2, Х3…Xn – existing interest rates in one of the banks;
n is the total number of bets available.
However, these calculations will lead to an average value, but not to a weighted average. In order to correctly calculate the last indicator, it should be remembered that the cost of using a loan directly depends on its amount.
According to this information, it can be concluded that if a company has loans in very large amounts, but with low interest rates, in its loan portfolio, then the total price of all available loans drops sharply.
Based on this principle, it was decided to calculate not the average value, but the weighted average.
Loan portfolio - an indicator of the totality of existing debt on the basis of one enterprise for all active operations loans for a fixed period.
You can find out the value of the weighted average loan rate by the remaining debt in each individual loan agreement.
The correct formula looks like this:
Iav.vz.=Tot.(Srem.*Itek.)/Tot.Srem.,
where Sost. - the balance of the loan debt;
Itech. is the current interest rate.
For convenience, the calculation is carried out in Excel tables using the special SUMPRODUCT formula.
It is impossible to answer this question unambiguously, since each region operates with its own indicators. In addition, depending on the type of loan being issued (mortgage, car loan, consumer purposes), these characteristics also vary.
Why is there a divergence? Because every financial institution, starting from the rules of its internal policy, exposes absolutely different conditions for loan programs - someone raises the rate, someone extends the repayment period, and some require mandatory registration of several types of insurance and securing their loan with collateral of existing real estate or other valuables.
In order not to fall into the trap high interest and long delays, it is necessary to prepare in advance and study the information.
Today the Internet gives excellent opportunity get acquainted with all existing banks and their offers.
In a matter of seconds, it will calculate all the parameters of the desired loan and, with an accuracy of up to a ruble, will display all the expected payments.
Focusing on the average rates for the programs of each of the banks, you can easily set the weighted average rate (using the formula).
And when the company is calculated independently, then it remains only to choose the most optimal option for your case, and feel free to go for money for your needs, whether it is the purchase of household appliances or the first stone in a start-up business.
For the normal functioning of the company, it always needs sources of financing. In addition to own assets, borrowed funds, such as loans, can also be used. third parties. However, each of the borrowers has the right to set their own interest rates on loans, which complicates the assessment of the cost of the organization's loans. It is in such cases that such an indicator as the weighted average interest rate on loans is used.
The concept of the weighted average rate can be interpreted in different ways, based on the level at which it is applied. For example, if we are talking about a specific financial institution, then the weighted average rate on loans is average the cost of all loans (both issued and received). In other words, the average value of the loan portfolio a separate bank. This indicator is considered within the organization to analyze the effectiveness of its financial activities.
If we consider the weighted average interest rate at the level of the entire banking system, then this term means the cost of loans taken and issued by all banks of the Russian Federation. It is used by the Central Bank to study the effectiveness and success of the country's banking system as a whole. In addition, the weighted average interest rate on loans of the Central Bank of the Russian Federation can be used as a criterion for assessing the dynamics of the promotion of a single credit policy of our state.
The calculation of the average interest rate arose due to the need to carry out a general the financial analysis organization's activities. But using the simplest arithmetic) it is impossible to make such calculations, since credit organizations work with different types loans that are issued at different interest rates.
Loans are:
Also, the weighted average interest rate can be calculated by the Central Bank separately for individuals and legal entities. These indicators are available for public use. For example, the weighted average interest rate on loans for individuals for a period of more than 365 days in December 2016 was 15.48%.
For stable performance banking organizations they need to control their own liquidity. Liquidity is the real ability of assets to become easily transferable in cash. This means that an asset is considered liquid if it can be short time sell at market price.
When, when analyzing current activities, a financial institution finds that it is excessively liquid (has a lot of liquid assets), it needs to issue as many interbank loans as possible. Conversely, when liquidity is low, banks are forced to raise assets on the side.
Interest rates on loans for individuals and organizations are directly dependent on the golden rule of supply and demand. Therefore, the Central Bank of the Russian Federation constantly monitors the volume of lending operations by calculating the weighted average interest rate on loans. This makes it possible to quickly respond to changes in the financial market and, if necessary, reduce or increase the level of interest rates on interbank lending operations.
To assess the liquidity of a bank, you need to know what is included in its assets. The assets of the bank are the resources of the organization that belong to it. Moreover, she has the right to dispose of them at her discretion. Bank assets include:
When a bank falls out of balance and becomes excessively liquid, it simply loses its profits. Since free funds can be invested and receive a certain percentage of profit from them. However, during the time when the money just lay on the accounts, they did not work, but lay as a useless load.
To correctly calculate average cost loan portfolio, organizations use a special formula that differs significantly from a simple arithmetic mean. Since the cost of a loan depends not only on its interest rate, but also on its amount.
This formula looks like this:
ATP \u003d ∑ (K * P) / ∑ K, where:
To understand how to use this formula, you need to put it into practice. Suppose an organization has three loans:
Knowing the formula, you can find out that the weighted average interest rate on loans provided by the company is equal to:
ATP \u003d (15 * 0.1 + 8 * 0.08 + 1.5 * 0.15) / (15 + 8 + 1.5) * 100% \u003d 0.097 * 100% \u003d 9.7%
In this case, the weighted average rate may change if:
The weighted average interest rates on loans in rubles are found similarly foreign currency loans. But since the analysis of financial activity is carried out only in national currency, it is necessary to take into account the exchange rate of the Central Bank at the time of assessing the loan portfolio.
In order to use borrowed funds as efficiently as possible, it is necessary to keep the weighted average interest rate at the lowest possible level. To do this, you need to follow some rules:
Weighted average interest rates on loans provided credit organizations, within one enterprise must be kept under constant control. This will allow you to effectively manage the resources of the company and maintain maximum efficiency of its work.
The same rule applies to the cost of all credit resources in the country. After all, the efficiency of the entire financial system of the state depends on the weighted average interest rate. However, we will leave this responsibility to the Central Bank, which copes with it perfectly.
The average market interest rate on deposits is the average rate for all deposits in a particular currency among banks in the country. At the same time, deposits with different investment periods and different conditions are taken into account.
The weighted average rate is also an excellent way to determine the liquidity and reliability of a deposit. Thus, above average interest causes joy and an instant desire to invest only among inexperienced investors. The rest of the investors understand that in most cases a catch is hidden behind a tasty offer.
For example, a common practice among structures on the verge of bankruptcy is to attract the maximum amount of capital in an attempt to solve their problems. Such banks are willing to take risks and pay for their miraculous relief from problems with higher dividend rates. But what are the chances that the bank will pull itself out of the abyss, and not go to the bottom, dragging your money along with it? After all, today the amount of compensation is only seven hundred thousand rubles.
However, the situation is not always so deplorable. Sometimes high deposit rates are also associated with favorable moments:
How to correctly calculate the average market rate of deposits?
The calculation of the average market interest rate on deposits assumes that it is necessary to take into account all offers on the market, sum them up and divide the result by the number of source banks. That is, we get the following formula:
F=((N_1+ N_2+⋯+N_n))/n
The resulting calculation can be used to analyze the liquidity and feasibility of your investments.
AT modern economy it is possible to carry out calculations not only of the average market interest rate for the country, but also to make calculations within a particular bank, investment portfolio. This should take into account:
| Options | Options | Description |
|---|---|---|
| Type of investment | Up to requirement | Such deposits include deposits that do not have a clearly defined investment deadline. The money is simply returned to the depositor at his request. At the same time, the interest on such accounts is lower than on time deposits. |
| Term Investments | Investment for a strictly defined period. It has a fairly high interest rate, which makes it attractive. But there is also a drawback: when trying to withdraw funds from circulation early, penalties are applied to the investor, up to the complete zeroing of all dividends. | |
| Capitalization period | 1 month | |
| 1 quarter | Usually, accruals with such a period indicate their frequency, which means that we are talking about compound interest. They are characterized by the fact that they are accrued at a certain interval throughout the entire investment period. For example: a deposit is opened for 1 year from compound interest and a capitalization period of 1 quarter. This means that dividends will be accrued 4 times a year. | |
| At the end of the period | Investments of this type are distinguished by the fact that dividends on them are accrued at the end of the deposit. That is, if the account is opened for a period of 3 years, then dividends will be accrued once, three years from the date of opening the account. Cases where this type of dividend accrual is applied are called deposits with simple interest. |
|
| Interest rate | The specific interest rate determines how much dividends will be accrued. However, it must be carefully analyzed, compared with the average interest rate. If we talk about the end of 2014, then for deposits in domestic currency, the average market rates were: · About 9% for short-term investments; · 9.7% for long-term investments; · Three and thirty-three per cent period for dividends, with the investment period up to the settlement requirement. Up-to-date information can always be found in the publications of the Central Bank. |
For portfolio investments, such a concept as the average market interest rate is also applicable. It is calculated for all deposits, and the method of calculating depends on which deposits are in the portfolio: we are talking about simple interest or compound interest. Although, of course, have their influence and 
other indicators:
When it comes to a deposit that is capitalized at the end of the term, where simple interest works, then the amount of dividends is calculated according to the following algorithm:
Working with compound interest is more difficult:
Thus, the calculation of the weighted average interest rate on the deposit allows not only to analyze and correctly assess the situation on the market and within the banking system. It also serves to evaluate specific deposits and calculate the monetization of dividends.
Suppose we need to find out the weighted average interest rate of the investment portfolio. The figure below shows the initial complete investment portfolio. For each investment, its value and the percentage rate of return are indicated. Suppose we need to determine the overall interest rate of return for the entire investment portfolio. To determine the level of portfolio return as a percentage, we use the following formula:
In order to calculate the weighted average interest rate, the share for each investment object in the total value of the portfolio is multiplied by the interest rate of return. The SUMPRODUCT function is ideal for multiplying two sets of data (arrays) and then summing the results. The function can have a maximum number of arguments up to 255, separated by semicolons. But in this formula, you need to use only 2 arguments.
The first argument is the value of all investments divided by their sum, which gives five percentages representing the weight of each investment in the portfolio. To the fund "Pioneer Promotions of Eastern Europe» accounted for the share of 17%, which was calculated by dividing the amounts 72021.35 by 423,655.02. The second argument to the function contains the interest rates of return on each investment. The SUMPRODUCT function multiplies each element in the first argument by the corresponding element in the second argument. The B2/B7 element is multiplied by C2, the B3/B7 element by C3, and so on. After multiplying all five elements, the function sums the results.
If we had simply used the AVERAGE function to calculate the average interest rate of return, we would have obtained a value of 5.906% as a result of its calculations. This is actually less than the weighted average interest rate of the portfolio. For example, the investment “Treasury Fund Top Brands” has a large percentage return, as well as a larger share in the investment portfolio than other positions.
In the above example, all computational operations are implemented using the SUMPRODUCT function in the process of calculating the weighted average. These calculations can also be implemented using simple functions written in adjacent adjacent cells. The figure below shows the same calculations as in the previous example, but instead of the SUMPRODUCT function, a slightly different method is used. In separate cells, the share in the portfolio for each individual investment is calculated, after which the impact of each percentage of return on the final result is calculated, and at the end all the results are summarized by the usual SUM function.
Excel is the most versatile analytical tool that is great for doing statistical analyzes data. To do this, Excel has a large arsenal of special statistical functions. Next, consider formulas that are used to analyze statistical data, for example, to average, segment or calculate frequency graphs.
To banking institutions worked as stable as possible, it is necessary that they be able to control their own liquidity. In this case, we are talking about the real possibility of assets being sold at any convenient moment. In essence, this means that the property can be sold in the shortest possible time at the market price.
When analyzing current liquidity a company may find itself with excess liquidity, that is, when there are a lot of such assets. To effectively use these funds, you can issue them as interbank loans. The situation is reversed when banks have assets with low liquidity and are forced to attract assets on the side.
When determining interest rates, the classical Keynesian rule is used, namely, the relationship between supply and demand. This moment determines the need to calculate the average rate on loans. For example, the indicator allows you to respond in a timely manner to changes in the provisions financial market, as well as to establish the need to increase or decrease interest rates on the loan.
To correctly determine the indicator, you must use a special formula. The calculation scheme differs significantly from the definition of a simple average value. Here, not only the interest rate, but also the amount of the loan plays a significant role. The formula looks like this:
ATP \u003d ∑ (K * P) / ∑ K, where:
To understand the calculation procedure, it is worth using practical example. Suppose there are three loans, and each has its own parameters:
The calculation will look like this:
ATP \u003d (15 * 0.1 + 8 * 0.08 + 1.5 * 0.15) / (15 + 8 + 1.5) * 100% \u003d 0.097 * 100% \u003d 9.7%, that is, the average is about 10%. Interest rates on loans in foreign currency will be determined in a similar way, however, when assessing, it is necessary to take into account the exchange rate of the Central Bank of the Russian Federation.
Summing up, it is worth noting that the procedure for calculating the weighted average is quite simple. To do this, you need to know the basic criteria for loan products and be able to use a special formula.
It is impossible to answer this question unambiguously, since each region operates with its own indicators. In addition, depending on the type of loan being issued (mortgage, car loan, consumer purposes), these characteristics also vary.
Why is there a divergence? Because each financial institution, based on the rules of its internal policy, sets completely different conditions for loan programs - someone raises the rate, someone extends the repayment period, and some require mandatory registration of several types of insurance and securing their loan with collateral real estate or other valuables.
In order not to fall into the trap of high interest rates and long delays, it is necessary to prepare in advance and study the information.
Today, the Internet provides an excellent opportunity to get acquainted with all existing banks and their offers. Online calculator in a matter of seconds, it will calculate all the parameters of the desired loan and, with an accuracy of up to a ruble, will display all the expected payments. Focusing on the average rates for the programs of each of the banks, you can easily set the weighted average rate (using the formula).
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The loan portfolios of banks and the Central Bank consist of a certain number of loans issued for different periods and for different amounts. They may also differ in types: negotiable, investment, etc. In addition to amounts and terms, these loans may differ in rates.
To have an idea of the real value of the loan portfolio, the Central Bank, like any other bank, uses the weighted average interest rate (WAT). It cannot be calculated as an arithmetic mean, as it must reflect the amount and term of each loan in the portfolio.
In business, the SPS is needed to assess the financial performance of the bank. The SPS can also be used by conventional organizations that use credit loans for business. The Central Bank uses SPS throughout the entire financial system of the country. With its help, he can evaluate the cost and productivity of all loans issued. This is done in order to form and promote monetary policy.
If this term is considered at the level of a conventional bank, then the CPS reflects the value of all loans that were issued or taken by this bank. Bank management focuses on this indicator to analyze performance.
If taken at the level of the Central Bank, then the ATP shows the cost of loans issued and received to other banks in the country. The Central Bank will be guided by this rate for the formation of its monetary policy, as well as for assessing the entire banking system as a whole. Thus, the CPS reflects the value of the loan portfolio.
The ATP is calculated on a daily basis by the Central Bank. By this he monitors the volume of credit transactions. In case of negative scenarios, the Central Bank has the ability to respond quickly and intervene in financial processes.
This rate is one of the important performance indicators. Banks are trying to regulate their liquidity. If it is high, then it issues loans, thereby placing excess resources and making a profit, and if it is low, then it takes to restore liquidity.
Often, in order to close their "financial holes", banks begin to actively lend. According to the documents, it turns out that the bank has a stable condition, but in fact this often does not coincide with reality. To avoid such cases, the Central Bank monitors the volume of credit deals.
The price of an interbank loan in the market may change based on the demand and supply of participants and the amount of money. This, in turn, is reflected in personal loan rates.
To stabilize the situation, the Central Bank daily monitors the volume of credit transactions, and also adjusts rates on interbank loans. The calculation of the ATP is carried out on a daily basis, which allows the Central Bank to monitor the liquidity of the banking system online, as well as regulate the cost of public resources.
This value is based on the amounts and terms of loans issued. As mentioned, it would be incorrect to calculate the ATP by deriving the arithmetic mean, so the weighted average method should be used, since the loan price depends on its amount and term. The Central Bank calculates the balance of the debt of each loan issued to banks.
The calculation formula looks like this:
ATP=(Σ(loan balances*interest rates on loans)/(Σtotal loans)
Since the Central Bank issues a huge amount of loans, it is simply unrealistic to manually calculate this indicator. The calculation is carried out automatically. The system derives ATP based on the balance of loans for the current day. Based on the value obtained, the Central Bank is already making an assessment of its loan portfolio.
The SPS for the Central Bank describes the cost of all credit resources of the state, so it can be considered an important indicator of the effectiveness of the banking system.
Organizations and individuals can calculate their ATP based on the availability of loans. The lower this figure is, the less you will have to overpay. To keep the SPS at an acceptable level, you need to follow some rules:
If an organization is actively lending, then it should also control its CPS. This will make it possible to use the company's resources expediently, and not to throw them away to pay off extra interest, as well as to control the efficiency of activities.
ATP is not a fixed value and will change depending on the operations being carried out. The increase or decrease will be influenced by factors such as full repayment of the debt, restructuring, refinancing, changing the rate on the current loan, receiving the next tranche, etc.
The correct tactic in influencing the SPS would be to pay off debts with high interest rates, reduce interest on existing loans, and plan repayment schedules so that "expensive" loans are repaid first.
Each organization has its own SPS criteria. This is due to the region where the company is located, the field of activity, and the types of loans taken. It is worth remembering that it is not so much interest that increases the cost of a loan, but also Additional services e.g. insurance, collateral, loan term.
Up-to-date information is posted daily on the Central Bank website in the "interest rates" section https://www.cbr.ru/statistics/pdko/int_rat/. Here you can also find an archive of rates for previous years and view their trend.
