The Use of ROA and ROE in Study of a Bank’s Profitability

Irena Munteanu () and Constantina-Alina Ilie Milos
Additional contact information
Irena Munteanu: “Ovidius†University of Constanta

Ovidius University Annals, Economic Sciences Series, 2021, vol. XXI, issue 2, 1078-1083

Abstract: Bank profitability has been and will continue to be a topic of interest for all the actors in corporate banking governance. During this period, the banking sector is facing the double challenge of sustaining credit flow in the new macroeconomic conditions characterized by a high degree of uncertainty and managing rising financial risks. Shareholders are preoccupied with the return on investment, the management with result commitments, the monetary authority with ensuring stability in the banking sector. This paper presents an analysis of bank profitability applied to a commercial bank in Romania. We will carry out the calculation and interpretation of the indicators and the positioning of the bank in relation to the system. The analyzed bank is situated above the sector’s average. According to the obtained results, the Romanian banking sector has been standing at the highest level in terms of profitability according to the EBA (European Banking Authority) classification, in terms of ROE. Being a classic model of analysis, the study can be developed, applied to and adapted for other banking institutions. We believe that this paper is useful for young researchers and analysts.

Keywords: ROA; ROE; bank profitability (search for similar items in EconPapers)
JEL-codes: E50 G01 G20 G21 G24 G30 (search for similar items in EconPapers)
Date: 2021
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://stec.univ-ovidius.ro/html/anale/RO/2021-2/Section%205/20.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xxi:y:2021:i:2:p:1078-1083

Access Statistics for this article

Ovidius University Annals, Economic Sciences Series is currently edited by Spatariu Cerasela

More articles in Ovidius University Annals, Economic Sciences Series from Ovidius University of Constantza, Faculty of Economic Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Gheorghiu Gabriela ().