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RATIO ANALYSIS OF
EASTERN BANK LTD.
Financial performance evaluation of EBL
2011 - 2014
Asset Utilization
1. PROFIT RATIO
Capital
Equity Multiplier
Asset quality
Loan Ratio
2. RISK RATIO
Tax Rate
Dollar Gap Ratio
14.18%
10.93%
ROE %
Return on Equity (ROE)
=
Net Income After
Taxes/
Total Equity
2014
10.93%
2013
14.48%
2012
14.18%
2011
19.03%
1.63%
1.60%
1.28%
ROA %
Return on Assets (ROA)
=
Net Income After Taxes/
Total Assets
2014
1.28%
2013
1.60%
2012
1.63%
2011
2.52%
Profit Margin %
32.28%
27.13%
26.46%
20.72%
Profit Margin %
Profit Margin
=
Net Income After
Taxes/
Total Operating Income
2014
20.72%
2013
26.46%
2012
27.13%
2011
32.28%
Profit Margin
A ratio of profitability calculated as net income divided by revenues, or
net profits divided by sales.
Profit Margin= (Net Income Operating Revenue) 100
20%
27%
28%
2014
Net Interest Margin
=
(Total Interest Income Total Interest
Expense) /
Total Assets
2013
2014
2.374%
2012
2011
2013
3.13%
2012
3.32%
2011
2.87%
Asset Utilization%
6.73%
6.00%
6.10%
5.99%
Asset Utilization%
Asset Utilization
=
Total Operating Income/
Total Assets
2014
5.993%
2013
6.06%
2012
6.00%
2011
6.73%
Asset Utilization
An assets utilization (activity, turnover) ratio reflects the way in which a
company uses its assets to obtain revenue and profit.
Asset Utilization = (Total Operating Income/ Total Assets) x 100
Equity Multiplier
8.72
8.71
8.51
8.06
Equity Multiplier
Equity Multiplier
=
Total Assets/
Total Equity
2014
8.51 times
2013
8.72 times
2012
8.71
times
2011
8.06
times
Equity Multiplier
The ratio of a companys total assets to its stockholders equity. The
equity multiplier is a measurement of a companys financial leverage.
Equity Multiplier = (Total Assets/ Total Equity)
35%
17%
2014
Provision for Loan Loss
Ratio
=
Provision for Loan
Losses/
Leases
ProvisionTotal
for Loans
Loan and
Loss
Ratio
2013
2014
1.51%
16%
2012
2013
0.76%
2011
2012
0.78%
2011
1.67%
Banks use the loan-loss coverage ratio to define the quality of its assets and how
well it protects itself from losses caused by problematic loans. The higher this ratio
is, the better the bank is handling itself in regards to loans.
Provision for Loan Loss Ratio = (Provision for Loan Losses/ Total Loans and Leases) x
100
Loan Ratio%
69.72%
69.55%
65.89%
65.33%
Loan Ratio%
Loan Ratio
=
Total Loans and
Leases/
Total Asset
2014
69.72%
2013
65.33%
2012
65.89%
2011
69.55%
Loan Ratio
A commonly used statistic for assessing a bank's liquidity by dividing
the banks total loans by its total assets.
Loan Ratio = (Total Loans and Leases/ Total Asset) x 100
5.16%
6.26%
6.02%
5.42%
2014
5.16%
2013
6.26%
2012
6.02%
2011
5.42%
23%
2014
2013
2014
1.39%
27%
25%
2012
2011
2013
1.26%
2012
1.20%
2011
1.26%
Occupancy Ratio%
0.56%
0.53%
0.40%
0.37%
Occupancy Ratio%
Occupancy Ratio
=
Total Occupancy Cost/
Total Asset
2014
0.40%
2013
0.56%
2012
0.53%
2011
0.37%
Occupancy Ratio
The occupancy ratio is simply the sum of all operating expenses and
debt service, divided by total assets. This tells us what percentage of
the total asset is used to cover occupancy cost.
Occupancy Ratio = (Total Occupancy Cost/ Total Asset) x 100
0.52%
0.33%
0.27%
2014
0.33%
2013
0.55%
2012
0.52%
2011
0.27%
Tax Rate%
39.22%
45.24%
47.62%
47.21%
Tax Rate%
Tax Rate
=
Total Tax Expenses/
Net Profit Before Taxes
2014
47.21%
2013
47.62%
2012
45.24%
2011
39.22%
Tax Rate
The tax rate describes the ratio (usually expressed as a percentage) at
which a business or person is taxed.
Tax Rate = (Total Tax Expenses/ Net Profit Before Taxes) x 100