Below are the abbreviated financial statements of two large UK banks, RBS and Barclays, for the year 2016. Using 10 ratios, discuss which one is delivering the better performance.

2017 ( mm) RBS Barclays

Net interest income 8708 21451

Net fees & commissions ` 2535 490

Other income 1347 0

Total operating income 12590 21941

Loan loss provisions (478) (2373)

Operating expense (16194) (16243)

Pre-tax income (4082) 3230

Tax (1166) (993)

Net income/loss (5248) 2237

Assets

Cash & marketable securities 219997 213323

Interbank lending 30138 43251

[Gross loans & advances] [364786] [454149]

Loans & advances net of LLRs 351950 449529

Other 196571 507023

Total 798656 1213126

Liabilities & Equity

Deposits 419524 471392

Interbank borrowing 0 0

Wholesale funding 46664 92603

Other 283064 591984

Common equity 49404 57147

Total 798656 1213126

Reported non-performing loans 7400 12040

Share price of RBS at end 2016 was 2.22, and of Barclays was 1.86. RBS had 120 mm shares outstanding, and Barclays 171 mm shares.

Hint: Calculate the 10 ratios:

1. net interest margin, 2) cost/income, 3) loans to deposits, 4) liquid assets to deposits, 5) leverage ratio, 6) NPLs/total loans, 7) LLRs/NPLs, 8) ROE, 9) ROA and 10) P/B ratio,