Equity Analysis: Decomposing Returns at a Retail Bank
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Equity Analysis: Decomposing Returns at a Retail Bank

Intuition Publishing
Updated Sep 24, 2020

The financial statements of banks are quite different from those of non-financial companies. In contrast to the five-element breakdown of return on equity (ROE) under the classic DuPont approach, a bank's ROE can be decomposed into simply return on assets and the equity multiplier. Here we show you how this breakdown is performed for a bank.

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