Westpac/Nab Comparison

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  • Topic: Generally Accepted Accounting Principles, Depreciation, Leverage
  • Pages : 2 (452 words )
  • Download(s) : 73
  • Published : October 5, 2008
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WBC/NAB Comparison

WBC has a higher Average ROE of 17.93% compared to NAB’s Average ROE of 16.03% during the 5 year duration period from 2003-2007. This is due to WBC’s ROA of 1.09% being higher than NAB’s ROA of 1.05%. While profitability of WBC is higher than NAB’s, NAB’s financial leverage was greater than WBC’s thus producing a higher ROE. NAB also has a higher Net Income compared to WBC. WBC has a higher Average Expense Multiplier of 16.42 compared to NAB of 15.31 as WBC has lower operating expenses and lower assets compared to NAB.

NAB has a marginal higher Average Asset Utilization of 8.02% compared to WBC’s of 7.95% due to NAB having greater amount of Net Sales and WBC having a lower amount of Total Assets. NAB has a greater amount of Averaged Total Assets of $436,832m compared to WBC of $280,114m. The lower Asset Utilization Ratio for WBC could be due to lower yields on assets, fewer loans, a smaller volume of earning assets, or a combination of these

NAB has a higher Average Expense Ratio during the 5 year duration period from 2003-2007 of 6.56% compared to WBC of 6.42%. This is due to NAB compensating its Mutual Fund Managers at a higher payoff compared to WBC due to its increasing performance. NAB’s Net Interest Margin is higher at 2.41% compared to WBC’s Net Interest Margin of 2.19% due to its increasing investment returns and lower interest expenses.

NAB has a higher Average Efficiency Ratio of 40.93% compared to WBC of 19.11%. NAB has a higher average Net Income of $4,590m compared to WBC of $2,812m. The differences in the Efficiency Ratio even thought Net Income is greater for NAB than WBC is due to NAB having higher Non-Interest Expenses compared to WBC. This is further shown by NAB having a lower Burden Ratio of 0.38% compared to WBC of 1.30% indicating that NAB performed better than WBC in generating non-interest income to cover its non-interest expense. Also NAB has a higher amount of Average Total Assets compared to WBC which...
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