Tag: Operational Leverage

What Activities Impact Your Bank’s ROE The Most?

Operational Leverage

A banker often wonders where best to spend their time in order to have to biggest impact on shareholder return. In this article, we do a quick overview of where you can gain the largest risk-adjusted operating leverage. While bankers generally know this data, many do not appreciate the difference between activities.  We look at eight key activities and ask the question – how would our risk-adjusted return on equity change if we increased production by a standard 10% of our current production levels?


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