Return on Average Equity (RoAE) and Return on Average Asset (RoAA) are core bank s indicators of measurement of Corporate results in Banking....followed by Asset quality , Capital adequacy , Customer penetration , Customer retention , NPLs, Net economic profit growth, Cash productivity ratio, Operating margins......

ROA, ROE, NPLs, net interest margin.

Basically, I suppose that capital adequacy should have been the most used ratio.

Dear Prof. Mehmed Ganic

Can you please explain about cash productivity ratio

Camels wass recommeded but RoE and RoA can be of good help in measuring performance

I agree with Prof. Kijjambu, CAMELS ratios are more comprehensive.

Net Interest Margin, % non-performing loans, % of retail & institutional deposits, sectoral distribution of credit, average cash balances maintained, ROA, ROE, non-fund as a % of total income, staff productivity (assets/staff).

cash productivity ratio may be expressed as cash from operating activities / capital  investments .... It helps us to assess whether there is enough net cash from operating activities available in a company in order to maintain the capital  investments of the business at its current levels ....

Indeed, the common ratios are RoAE and RoAA. But CAMELS if you understand its principles would also be very helpful. Best regards

Dickson

Generally, it depends from which point of view you are looking at the bank. There are different key indicators for investors (ROE, RORAC, RAROC), operating managers (RORAC, RAROC, loan volume, LtV) and authority (LCR, NSFR, capital adequacy) for example. You need to decide which point is interesting in the light of your studies. Regards, Radoslaw

Dear Srikanth

The following variables are in the publicly available FDIC website. The variables use the FDIC code and are then followed by the definition many of which are ratios. This is a long list but of course you can pick and choose from them.

brokdep brokered deposits divided by total deposits capital equity capital divided by total assets cash cash plus cash due from depository institutions divided by total assets chargeoff net charge offs divided by average loans ciloan commercial and industrial loans divided by total assets comm_real commercial real estate loans divided by total real estate loans cons_devlp construction and land development loans divided by total real estate loans debt_sec total short-term debt security divided by total assets deploan loans divided by depository institutions divided by total assets foreclosure foreclosed real estate divided by total assets hpindexsa Home price index seasonally adjusted idloan loans divided by individuals divided by total assets insureddep Insured deposits divided by total deposits interbank interbank deposits divided by total deposit loanast total loans divided by total assets loangrowth growth rate of total loans and leases loansale net gains on sales of loans divided by total non-interest income lossallow loan loss allowance divided by total loans MBS mortgage-backed securities divided by total assets mul_family multifamily residential real estate loans divided by real estate loans non_income non-interest income divided by total income off-bal off-balance sheet derivatives divided by total assets pastdue non-performing loans divided by total assets pigrow growth rate of personal income realloan real estate loans divided by total assets roa return on assets sec_asset securities held for investment divided by total assets sig_family 1–4 family unit residential loans divided by total real estate loans size log of total assets tier1 Tier 1 risk-based capital divided by total risk-weighted assets trade_ast trading account assets divided by total assets

Raymond A. K. Cox

Thompson Rivers University

Dear Srikanth

Besides all measures mentioned so far, Tobin's Q is another good measure that can be used.

Sara

Dear Srikanth

the choice of the indicators is relevant from your research design. do you look at financial performance or business/stratetic performance of the firm ? If you look deeper on this last point you can also look as the wages, the investments, the numbers of clients, equity capital, etc. In fact a bank is a financial intermediary and also a firm. Moreover, there several kind of banks : public banks, co-operatives bank, for-profit banks

As an old banker Capital Adequacy ratio was very important at my time. The governments want it above a certain level. Its calculation is complicated b/c there are various risk factors for various assets including off balance sheet. Another important ratio is Foreign Exchange (FX) exposure ratios FX assets/FX liabilities and it should be calculated for every currency including the local. Again this ratio is watched by governments (Central Banks) it should be between a certain range for every currency.

There are so many ratios to measure performance. I would recommend you use basic KPI's (key performance indicators) to measure the performance. profitability ratios such as; ROA, ROE, operating profit margin e.tc can be used as profitability proxies to measure banks performance. Also liquidity ratios such as current ratio can also be used to know the working capital position of the bank and as such it also measures the banks performance. Regards.

In addition to the aforementioned "Ratio Texas" allows to identify banks that are in a vulnerable position.

Several ratios are used to measure the profitability of banks and other related industries. Most researchers usually use four measures which include: - the rate of return on firm’s assets (ROA), the rate of return on firm’s equity (ROE), operating profit margin and net firm’s income. However ROA and ROE are more fundamentally used as measures of companies’ profitability since they measure relative profitability, and hence more reliable as opposed to the others which measure the absolute profitability of the company.

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ROA, ROE and NIM

RORAC = (Return on risk-adjusted capital)

LLC = Loan loss coverage ratio

EP = Earnings power ratio

It will depend on your research questions Like if you want to see profitability ROAA, ROAE are widely used. If your concern is stability interest coverage ratio and other default related ratioS like z-score and o-score are appropriate. Yet if you are more interested in efficiency rated matters than some expense related ratios like overhead expenses and non performing loans would be appropriate.

https://books.google.com.bd/books?id=Zp-bKgAACAAJ&dq=commercial+bank+management&hl=en&sa=X&ved=0ahUKEwjyuqvJ0praAhUgSo8KHe1dBEEQ6AEIJTAA

ROA, ROE and NPM: mostly used. But then they’re market based measure of performance such as EPS

See my paper, " Application of CAMEL model to assess the financial performance of banking companies, " Pakistan Journal of Commerce

All financial ratios explained with a simple example.

#MBA #MBAFinance #Mcom #Business #Analyst #BBA #BCom

https://www.sarpublisher.com/types-of-financial-ratios-understand-with-examples/