Azerbaijan’s banking sector sees ROE declining

Azerbaijan’s banking sector sees ROE declining
# 03 August 2009 12:05 (UTC +04:00)
Baku. Vahab Rzayev – APA-Economics. As of July 1, Return on Equity (ROE) ratio for Azerbaijan-based banks stood at 0.212% for the first half, said the Central Bank of Azerbaijan.

According to statistics, the ratio is down 0.005 points from a year ago, up 0.42% from early this year and down 0.025% from the end of the first quarter.

ROE measures a bank’s efficiency at generating profits from every manat (national currency) of net assets (assets minus liabilities), and shows how well a company uses investment to generate earnings growth. Simple ROE is equal to a net income divided by total equity, expressed as a percentage.

Increasing ROE indicates improvement in commercial banks’ capital efficiency.


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