Page 15 - FIN435 RHB vs BPMB

Bank Pembangunan Malaysia Berhad Ratio Internal Comparison

1. Profitability Ratio
Return on Assets (ROA):

Return on Assets Graph

1.00% 0.78% 0.86%
0.80% 0.68%
0.60%
0.40%

0.20%
0.00%
Category 1
2018 2017 2016

It shows how capable the management of the bank has been in converting the institution’s
assets into net earnings, as. Here the return on asset has a downward trend from 0.86% in
2016 , 0.79% in 2017 and 0.65% in 2018. A slight decrease of ROA indicates less
profitability. Overall, Bank Pembangunan record a slight decreased for 3 consecutive years
from 2016 to 2018 and should take few decision to overcome it.
Return On Equity (ROE):

Return On Equity Graph

4.00%
3.05%
2.76%
3.00%
2.22%
2.00%
1.00%
0.00%

Category 1
2018 2017 2016

Return On Equity (ROE) measures the rate return of flowing of income to the bank
shareholders. It reveals how much the a profit a company earned in comparison to the total
amount of shareholder equity. ROE is is affected by the same income statement items that
affect ROA & the degree of financial leverage. Based on the data, the trend analysis exhibit
downward trend from 3.05 % in 2016 to 2.76% in 2017 to 2.19 % in 2018 consecutively.
This trend was influenced by Return on Asset (ROA) data which also indicate downward
trend. In conclusion the shortage of profits lead to this downward trend. The company has to
increased their profit to increase their return on equity ratio.

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