ok

givan:
Shareholders in one chance...

. Truely one chance, just like 1st bank did last year. Too bad.

The introductory line is also a lesson for individuals on financial prudence. I have taken this to heart.

when banks hav bad and non performing loans and still share dividends, its only logical to say they are sharing depositors savings not dividends

linearity:


Shares is not a loan, it gives you an ownership right to the asset, in this case the bank. You bought an asset, the bank did not owe you a dime, you can turn around and sell those shares/asset to someone else just like you wil do to any other asset you own e.g. a car, TV, etc...and unlike these other assets, you cannot return your share back to the bank, unless the bank are offering a buy back program.

All shareholders have ownership rights e.g. to Bank in proportion to their shares relative to total shares in circulation.

Which means, as owners you are the one in debts if the bank is in debt, as shareholders are part of the Board of Directors and often dictate the macro directions of the Bank.

In bankruptcy filings, debtors are usually given priority in payment, before shareholders are considered, as it is not fair to reward those who ran the company into the ground, before debtors.

Now, you might say what am saying is not applicable to all shareholders...that is correct, because the magnitude of your voice and influence as a shareholder is directly proportional to the percentage of your shareholdings. The individual that owns the highest share percentage essentially runs the company through the Board of Directors and determines what goes on, since he/she stands to loss more if things don’t work out....so if you want to be counted, buy more shares.

you just refreshed my memory

What we seem not understand here, is the bad loan; the bank is not owing, it is the individual, firm, and govt the bank grant loan and they are unable to payback or the chances of recovering such loan is low; say 10% chance of recovery, though the bank can still make profit at the end, but these loans (bad loans) owed by the general public is still included in the statement of financial position(balance sheet) of the bank since it yet to be regarded or declared as bad debt.
But in actual sense it is bad debt, and balance sheet balance is overcast i.e inflated

Note; loan are asset to bank, because it money the public owed them just like receivable (debtor).

So, when it is later know as bad loan (bad debt), if necessary adjust are made on balance sheet, the total balance drop that does not mean poor performance.
Let say the balance before on both side of the balance sheet is 1000000 now it will be 900000, if bad loan is 100000.

If the bank put it to be bad debt, investor will lose confidence in the bank, share price drop, no dividend will be declared, inorder to prevent these it will not be declared as bad debt, profit will be declared and share price goes up, bank wins, investor win and everything is fine.

The rate of non performing loans is truly on the increase, the annoying part is that banks are still paying dividend and declaring irregular end of the year book...