The ongoing credit crunch in the world economy requires both the financial institutions and the borrowers and lenders to be hyper vigilant about their activities and there peers’ activities. One wrong move can result in a serious loss of money. The depositors in particular…
The second part is done in order to get an idea about the safety and soundness of Citibank Las Vegas branch from a depositor’s perspective.
There are a number of ways to examine the profitability of a bank; for example, for measuring the after-tax rates of return, ROA (the return on assets) and ROC (the return on capital), are extensively utilized for testing the performance of banks. The analysts and regulators of the bank use these measures in order to assess the performance of other players in the industry as well as to forecast trends in market structure. This helps them to gather data to predict bank failures and mergers, and also to come up with a strategy that serves the interests of their bank well.
Return on assets (ROA) of a firm is an indicator of how profitable the firm is relative to its total assets, and is calculated by dividing the net income of the firm by its total assets. ROA gives us an idea about how efficient the management of the firm is at generating earnings by using its assets. A higher ROA percentage is considered better as this means that the same level of investment is yielding more earnings for the firm. Citibank’s net income in the year 2009 was $107,923,000,000, and its total assets were worth $1,161,361,000,000. This results in a ROA of 9.3% for the year 2009 which is considerably higher than the ROA recorded in 2008 (74,767Mn/1,227,040Mn = 6.1%). This suggests that there has been a rise in Citibank’s ability to earn with lesser amounts of input i.e. the profitability of Citibank has increased.
Return on Capital (ROC), on the other hand, is a measure of how efficiently a firm uses the money that has being invested in its processes. It is being measured by the division of net income and the total capital. ROC should always be greater than the rate at which the firm borrows money. This is to ensure that an ...
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(Bank Analysis Paper-Economics Essay Example | Topics and Well Written Essays - 1250 Words)
“Bank Analysis Paper-Economics Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.net/miscellaneous/393883-bank-analysis-paper-economics.
As such, economic analysis relates to the study of economic systems in an industry to ascertain the effectiveness of the operations of a given industry with reference to its profitability1. With this, we are able to establish the optimum use of the limited resources to achieve a given economic objective.
In conclusion, the paper culminates with a review of the insights derived from the case of Barclays and whether the strategies can deliver its performance targets in 5 years time. The history of Barclays Bank dates back to the early 1690s when the bank was founded as a financial institution to assist ancient merchants in managing their business finances.
Indeed, since 1988, the firm highly focused on acquisitions for achieving a rapid growth in the USA market. As Citizens Group was growing the need for securing the firm’s coherence was made clear. The introduction of Credo, a framework of the firm’s values and mission, in 2002, has highly supported the improvement of the firm’s relationships with its customers, its employees and the community.
The decisions made would enable the monitoring along with control of the monetary and economic conditions so that the country continues experiencing growth that is sustainable and inflation rates that are low. In the article, the Governor makes the observation that the European continent has experienced weak monetary with their future values still appearing to continue falling in the future.
The implications of the price of zero are exemplified by the inclination to consider zero as acting as a special price, which in turn results in overreaction to free products and services as though zero price instantly denoted increased value. The price of zero has a peculiar effect on demand where the concept of free has the impact of bending the demand curve as demand increases in an extremely non-linear way.
It is shown, that the level of central bank`s independence directly indicates the level of responsibility of the state for the value of legal tender. Maintaining internal and external value of money is a function of inflation targeting and appreciation/depreciation of currency. Both government and central bank are responsible for the success of monetary policy.
Other mining activities accounted for ASD 0.79 billions forming 0.24% of the total GDP.Thus taking the contribution of mining industries to 29.2 %.The year 2004 GDP at current prices was reckoned at ASD 378.61 billions. Table (2-1) of the Annual Report further shows that the oil and natural gas sector accounted for 32.56 % at ASD 123.26 billions.
(McConnell, Brue, & Flynn, 2008)
One of the central debates in monetary economics therefore rests upon the neutrality of money and whether money can actually result into the development of price increase or not. This debate is also based on the