74. Competent authorities should undertake an analysis of quantitative features of the institution's current business model to understand its financial performance and the degree to which this is driven by its risk appetite being higher or lower than peers.
75. Areas for analysis by competent authorities should include:
a. profit and loss, including trends: competent authorities should assess the underlying profitability of the institution (e.g. after exception items and one-offs), the breakdown of income streams, the breakdown of costs, impairment provisions and key ratios (e.g. net interest margin, cost/income, loan impairment). Competent authorities should consider how the above items have evolved in recent years and identify underlying trends;
b. the balance sheet, including trends: competent authorities should assess the asset and liability mix, the funding structure, the change in the TREA and own funds, and key ratios (e.g. return on equity, Core Tier 1, funding gap). Competent
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