Explanation of a bank experiencing rising total profits

Assignment Help Financial Management
Reference no: EM131305061

An article in the Wall Street Journal states that Royal Bank of Canada's ROE during the fourth quarter of 2009 was 14.5%, having fallen from 16.4% during the fourth quarter of 2008.

Despite the decline in ROE, the article states that the total amount the bank had earned in profits was higher than it had been a year earlier.

What is the most likely explanation of a bank experiencing rising total profits and a falling ROE?

Reference no: EM131305061

Questions Cloud

Will it have less money available to lend : How would increasing loan loss reserves reduce the risk of bankruptcy for a smaller bank?- If a bank increases its loan loss reserves, will it have less money available to lend?
Calculate npv and irr for project-reject pineapple project : Hawaiian Coconut Milkshakes Inc. is considering the following project. They would like to expand and add a pineapple branch. The firm has paid $95,000 to a consultant in order to find out more about the available projects and possibilities. Calculate..
What is first nationals roe now : Suppose First National's equity capital declines to $10 million, while its assets and ROA are unchanged. What is First National's ROE now?
Algorithm to find all the primes less than or equal to n : The first number is removed from the list, and announced as a prime number, and all multiples of this number up to n are removed from the list. This process continues until the list is empty.
Explanation of a bank experiencing rising total profits : An article in the Wall Street Journal states that Royal Bank of Canada's ROE.- What is the most likely explanation of a bank experiencing rising total profits and a falling ROE?
.how is production planned from customer demand : Customer demand and process capacity relationships.How is production planned, from customer demand to production schedules?Quality Management issues.Product delivery issues.The interfaces of the process with both the external and internal customers.
Would you become an investor in the bank : You learn that the bank has $300 million in capital and $5 billion in assets. Would you become an investor in this bank? Briefly explain.
Identify two weaknesses target has in comparison to walmart : Identify 1-2 weaknesses Target has in comparison to Walmart. For each weakness, explain your rationale in 2-3 sentences. Identify 1-2 strengths Target has in comparison to Walmart.
How can you dictate your future : How can you best manage whenever you do not have the means to dictate your future?

Reviews

Write a Review

Financial Management Questions & Answers

  What is its percentage after-tax cost of debt

Finance Micro Spinoffs Inc. issued 10-year debt a year ago at par value with a coupon rate of 5%, paid annually. Today, the debt is selling at $1,210. If the firm’s tax bracket is 20%, what is its percentage after-tax cost of debt? Assume a face valu..

  What is one year forward rate expected on treasury bills

Assume the current interest rate on a 1-year Treasury bond (1R1) is 5.70 percent, the current rate on a 2-year Treasury bond (1R2) is 6.45 percent, and the current rate on a 3-year Treasury bond (1R3) is 7.70 percent. If the unbiased expectations the..

  Manufacturer gaining by the release of the new keyboard

A manufacturer of peripheral devices for PCs decides to try and capture some of the PC gaming market by creating gaming versions of its traditional peripheral devices. What option is the manufacturer gaining by the release of the new keyboard?

  Six influences on call and put options valuation-asset price

Consider the six influences on call and put options valuation – asset price, exercise or strike price, time to expiration, risk free rate of return, dividend or income yield, and asset volatility. Which of the six, when increasing, raises the market ..

  Describe some of costing systems available to controller

Describe some of the costing systems available to the controller and how the controller can use them for different applications and different types of organizations. Which of these costing systems are available either at your organization or one whic..

  Environmental performance but lack immediate business appeal

What could Mielewski, Flanigan and Nunez do to create the momentum for changes that aim toward better environmental performance but lack immediate business appeal?

  Accrual of accounting differ from cash basis of accounting

What is the purpose of this statement? Where in the financial statements would there be important explanatory information? In what financial statement would one identify the purchase of long-term investments? How does the accrual basis of accounting ..

  Understanding of the concept of cost capital

Based on your understanding of the concept of cost capital, which of the following statements are valid?

  Issue of bonds with a maturity

Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate, and semi annual interest payments. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 6..

  Reducing the dividends

Revelation Co. just paid its annual dividend of $3.3 per share. The company has been reducing the dividends by 9.4 percent each year. How much are you willing to pay today to purchase stock in this company if your required rate of return is 14.8 perc..

  What is the equipments after-tax salvage value

Amigo Gas Co. is selling off some old equipment it no longer needs because its associated project has come to an end. The equipment originally cost $27,500, of which 75% has been depreciated. The firm can sell the used equipment today for $5,000, and..

  Considering the purchase of an outstanding kramerko bond

It is now march 1, 2001 and you are considering the purchase of an outstanding Kramerko bond with a par value of $1000 that was issued March 1, 1999. the Kreamerko bond has a 9.5 percent annual coupon and a 30-year original maturity (it matures on Fe..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd