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Return On Equity (Bank) Calculator

Work out return on equity (bank) instantly with clear inputs, formula shown and shareable results.

About Return On Equity (Bank) Calculator

Return on equity decomposes into return on assets multiplied by the equity multiplier. That makes clear how much of a bank's headline return comes from operating performance and how much simply from being leveraged.

Formula

Return on equity

ROE = ROA × equity multiplier, where the multiplier = assets / equity

Worked example

With the default values below, Return On Equity (Bank) Calculator returns Return On Equity of 12.7273%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net Profitminimum 0
14,000,000
Average Shareholders Equityminimum 0
110,000,000
Average Total Assetsminimum 0
1,200,000,000

Results

Return On Equity
12.7273%
Return On Assets
1.1667%
Equity Multiplier
10.909
Return Added By Leverage
11.5606%

Step by step

  1. 1Values used
  2. 2Return on equity
  3. 3Return On Equity= 12.7273
  4. 4Return On Assets= 1.1667
  5. 5Equity Multiplier= 10.909
  6. 6Return Added By Leverage= 11.5606

Assumptions and limits

  • The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Is a high return on equity always good?

Not if it comes from thin capital. The same return on less equity means more risk, not more skill.

How has regulation changed returns?

Higher capital requirements have lowered equity multipliers, so achievable returns on equity are structurally below pre-crisis levels.

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