ECONOMIC VALUE ADDED (EVA) WITHIN THE BANKING ENVIRONMENT

Abstract

The failure of many small and medium-sized banks and the focus of corporate governance issues have called for improvements in performance measurements within the banking environment. The element of performance measure and wealth creation is seen as vital from the perspective of a small-capitalised bank. The purpose of the project report is on deriving Economic Value Added measurements and the value drivers for a small niche bank.

The management accounts of a small niche bank were analysed and the findings were that only four accounting adjustments are required to determine economic value added for a small niche bank. The value driver in the bank is the focus on improving operational efficiency.