a) Consider the financial ratios of ABK Bank and the average ratios of peer banks based on2015 year-end data shown in the table below:RatiosABK BankPeer BanksReturn on equity (ROE)14.50%7.40%Return on assets (ROA)Asset utilisation (AU)Expense ratio (ER)1.68%0.85%6.65%5.50%4.95%4.62%TAX0.02%0.03%Note that TAX = applicable income tax/total assetsCompare and critically discuss the performance of ABK Bank and that of its peer banks.Conduct a return on equity decomposition analysis for ABK bank and the peer banks aspart of your discussion. What are the possible limitations in your analysis?

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Answered: Consider the financial ratios of ABK…

Consider the financial ratios of ABK Bank and the average ratios of peer banks based on 2015 year-end data shown in the table below:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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