Consider the financial ratios of ABK Bank and the average ratios of peer banks based on...

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Consider the financial ratios of ABK Bank and the average ratios of peer banks based on 2015 year-end data shown in the table below: Ratios ABK Bank Return on equity (ROE) 14.50% Return on assets (ROA) 1.68% Asset utilisation (AU) 6.65% Expense ratio (ER) 4.95% TAX 0.02% Note that TAX = applicable income tax/total assets Peer Banks 7.40% 0.85% 5.50% 4.62% 0.03% Compare and critically discuss the performance of ABK Bank and that of its peer banks. Conduct a return on equity decomposition analysis for ABK bank and the peer banks as part of your discussion. What are the possible limitations in your analysis? Critically discuss the CAMELS ratings and its effectiveness in banking regulation. Consider the financial ratios of ABK Bank and the average ratios of peer banks based on 2015 year-end data shown in the table below: Ratios ABK Bank Return on equity (ROE) 14.50% Return on assets (ROA) 1.68% Asset utilisation (AU) 6.65% Expense ratio (ER) 4.95% TAX 0.02% Note that TAX = applicable income tax/total assets Peer Banks 7.40% 0.85% 5.50% 4.62% 0.03% Compare and critically discuss the performance of ABK Bank and that of its peer banks. Conduct a return on equity decomposition analysis for ABK bank and the peer banks as part of your discussion. What are the possible limitations in your analysis? Critically discuss the CAMELS ratings and its effectiveness in banking regulation.

Answer rating: 100% (QA)

Performance Comparison Return on Equity ROE ABK Bank has an ROE of 1450 which is significantly higher than the peer banks average ROE of 740 This indicates that ABK Bank is generating a higher return ... View the full answer