Work out return on equity (bank) instantly with clear inputs, formula shown and shareable results.
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.
Return on equity
ROE = ROA × equity multiplier, where the multiplier = assets / equity
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.
Not if it comes from thin capital. The same return on less equity means more risk, not more skill.
Higher capital requirements have lowered equity multipliers, so achievable returns on equity are structurally below pre-crisis levels.