Return on equity
Return on equity (ROE) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity. ROE shows how well a company uses investment funds to generate earnings growth.
One bank return on equity is quite stable as we see year 2011, 2012 their ROE is 17% and next Two Years Its decrease 2% but ultimately last year its increase 6% which is good for shareholder.
Formula: Net Income/Total Equity. Year | Net Income | Shareholder equity | ROE | 2011 | 1,869,876,262 | 10,885,182,699 | 17% | 2012 | 1,631,216,753 | 9,583,366,834 | 17% | 2013 | 1,277,186,579 | 8,394,054,021 | 15% | 2014 | 1,120,246,182 | 7,312,729,390 | 15% | 2015 | 1,271,757,611 | 6,156,992,149 | 21% |
One bank return on equity is quite stable as we see year 2011, 2012 their ROE is 17% and next Two Years Its decrease 2% but ultimately last year its increase 6% which is good for shareholder
Net Interest Margin
The net Interest margin can be expressed as a performance metric that examines the success of a firm’s investment decisions as contrasted to its debt situations. A negative Net Interest Margin indicates that the firm was unable to make an optimal decision, as interest expenses were higher than the amount of returns produced by investments. Thus, in calculating the Net Interest Margin, financial stability is a constant concern.
Calculating the Net Interest Margin
The Net Interest Margin is calculated as:
Net Interest Margin = (Investment Returns – Interest Expenses) / Average Earning Assets
