Question
Balance Sheet 2016 2017 2019 Cash 150 140 165 Marketable securities 500 450 500 Equipment and buildings 600 600 600 Net Loan 1200 1300 1250
Balance Sheet
2016
2017
2019
Cash
150
140
165
Marketable securities
500
450
500
Equipment and buildings
600
600
600
Net Loan
1200
1300
1250
Total Assets
2450
2490
2515
Deposit
1000
900
1000
Non-deposit
300
200
300
Equity
1150
1390
1215
Total Liabilities and equity
2450
2490
2515
Income Statement
2016
2017
2019
Interest revenue
500
450
500
Interest expense
100
150
150
Non interest revenue
100
150
150
Operating expense
50
50
60
Provision for loan loss
30
30
30
Pre tax net operating income
420
370
410
Securities gains/loss
30
40
40
Tax
80
70
80
Net Income
370
340
370
From the above data, as an analyst of the bank, calculate the ROE for all 3 years. Now break down the ROE in different components to understand the following factors.
I.Tax efficiency
II.Control of expenses
III. Asset and fund management
Now write a brief report of competitive analysis on above factors and what can be done incoming years to improve them.
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Quantitative Analysis for Management
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Ha
12th edition
133507335, 978-0133507331
