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What are the types of business performance evaluation index system of commercial banks?
① Return on assets
② Bank spread rate
③ Non-interest net income rate
④ Bank profit rate
⑤ Return on net assets
Profitability index is to measure the ability of commercial banks to earn income by using funds while controlling costs and expenses.
The core of profitability index is return on assets and return on equity. Using these two financial indicators and other derivative financial ratio indicators, we can accurately understand the profitability of banks.
Basic methods: At present, the commonly used methods are fishbone diagram analysis and Nine palace map analysis, which can help us to grasp the main problems and solve the main contradictions in practical work.
Main steps of fishbone diagram analysis:
① Determine the business priorities of individuals/departments. Determine which factors interact with the company's business.
② Determine business standards. Define the key elements of success and the strategic means needed to meet business priorities.
③ Determine the key performance indicators and the practical factors to judge whether the performance standards are met.
Extended data
Traditional indicators for evaluating the profitability of banks include return on equity and return on assets. The biggest drawback of this indicator is that it does not take risk into account.
For the need of risk management, a new risk-based profit evaluation index-risk-adjusted rate of return (RAROC) has gradually emerged in western commercial banks.
This method originated in the 1970s and was initiated by a team of bankers. Its original purpose is to measure the risk of bank credit portfolio and the number of shares needed to limit risk exposure at a specific loss rate.
Since then, many large banks have developed the RAROC method, the basic purpose of which is to determine the amount of equity capital needed for bank operation.
At present, the traditional indicators for evaluating the profitability of domestic commercial banks are mainly ROE (return on net assets) and ROA (return on assets), and their calculation formulas are as follows:
Return on net assets = net income/owner's equity
ROA= net income/average asset value
Or ROA= net income/book value of ending asset value.
Baidu Encyclopedia-Performance Indicators
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