Standard Bank Ltd

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6. Financial Performance Analysis
With the help of 5 years balance sheet and income statement managed from the Annual Reports of Standard Bank Limited I have done the following ratio analysis. Financial indicators in the last six years

|Item |Ratio |2007 |2006 |2005 |2004 |2003 | |Earning Ability |Return on Equity |20.59% |16.71% |23.16% |16.05% |10.94% | |  |Return on Assets |2.19% |2.11% |1.25% |087% |0.99% | |  |Net Interest Margin |3.89% |3.74% |2.86% |2.30% |3.93% | |  |Earning Base in Assets |95.21% |99.42% |93.94% |95.70% |87.49% | |Productivity |Deposit Per Branch |485.00 |374.16 |315.50 |274.91 |228.23 | |  |Deposit Per Employee |21.56 |17.32 |15.65 |16.82 |8.41 | |  |Advance Per Branch |433.38 |330.14 |268.90 |236.52 |83.53 | |  |Advance Per Employee |19.26 |15.28 |13.34 |9.85 |3.08 | |  |Net Profit Per Branch |13.59 |10.12 |5.08 |3.53 |2.59 | |  |Net Profit Per Employee |0.604 |0.469 |0.248 |0.131 |0.095 | |Cost – Efficiency |Manpower Expense to Total Expense  |13.35% |11.96% |16.71% |18.37% |9.28% | |  |Total Interest Expense to Earning |5.35% |6.53% |6.44% |6.40% |22.02% | | |Assets  | | | | | | |  |Total Non-Interest Expense to |2.13% |2.50% |2.81% |2.91% |7.52% | | |Earning   Assets | | | | | |

|6.1 Comments on Different Ratios: Return on equity: Net Profit After Tax/Total Equity CapitalEquity Capital = Paid-up Capital + | |Reserve & Surplus + Undistributed Net Profit | |Note: ROE is a measure of the rate of return flowing to the bank’s shareholders. Though it could not make any profit in the first | |year, it started improving gradually. The highest ROE achieved in 2004. | |  | |Return on assets: Net Profit After Tax/Total AssetsNote: ROA is primarily an indicator of managerial efficiency. It indicates how | |capably the management of the bank has been utilizing the institution assets to generate net earnings.After the initial loss | |started improving, but the rate is too low. The highest ROA achieved in 2006.  | |Net interest margin: (Interest Income – Interest Expense)/Total AssetsNote: The net interest margin measures how large a spread | |between interest revenues and interest cost management has been able to achieve by close control over the earning assets and | |pursuit of the cheapest sources of funding.Increasing over the years except in the year 2002 & 2003....
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