Based on the information provided below about bank a and b. compute for each bank

| March 31, 2017

Question
Based on the information provided below about bank a and b. compute for each bank its return on assets (ROA), return on equity (ROE), and leverage ratio ( bank assets divided by bank capital)

Bank A has a net profit after taxes of 1.8 million and the balance sheet show

Assets Liabilities

Reserves $5 Deposits $100

Loans $70 Borrowing $10

Securities $ 45 Bank capital $10

Bank B has a net profit after taxes of 0.9 million

Assets Liabilites

Reserves $7.5 Deposits $75.0

Loans 55.0 Borrowing 3.0

Securities 23.5 Bank capital 8.0

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