Return on capital (ROC) is used by financial companies such as banks not only as a measurement of profitability, but as an indication of the banks' ability to create value on the amount invested by the shareholders. Sberbank was the European bank with the highest ROC in 2021, based on a ranking of the largest European banks in terms of market capitalization.
Pre-tax profit
Pre-tax profit displays the amount profit a company has made before paying corporate income taxes. Essentially, it is the calculation of deducting all expenses from revenue except taxes. As of 2021, HSBC had the highest amount of pre-tax profit of any bank in Europe with almost 19 billion U.S dollars.
Other measurements of a banks size
Another way in measuring a bank's strength, size and health is through its total assets. Total assets are one of the main measures of a bank's prosperity and is defined as all assets owned by a bank. This includes, but is not limited to; cash and balances, loans and advances to banks and customers, as well as debt securities. Europe’s largest bank in 2021 had almost three trillion euros in total assets. Another measure is market capitalization, which is a measure where a company’s size is calculated by multiplying the number of outstanding shares by the cost of one share. Market Capitalization is an important metric for investors as it is simple to calculate and is also a good indicator for risk-assessment.
Returns on capital of the European banks with the highest market capitalization in 2021
Characteristic
Return on capital ratio
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The Banker. (July 19, 2022). Returns on capital of the European banks with the highest market capitalization in 2021 [Graph]. In Statista. Retrieved September 01, 2024, from https://www.statista.com/statistics/1066007/leading-banks-ranked-return-on-capital-europe/
The Banker. "Returns on capital of the European banks with the highest market capitalization in 2021." Chart. July 19, 2022. Statista. Accessed September 01, 2024. https://www.statista.com/statistics/1066007/leading-banks-ranked-return-on-capital-europe/
The Banker. (2022). Returns on capital of the European banks with the highest market capitalization in 2021. Statista. Statista Inc.. Accessed: September 01, 2024. https://www.statista.com/statistics/1066007/leading-banks-ranked-return-on-capital-europe/
The Banker. "Returns on Capital of The European Banks with The Highest Market Capitalization in 2021." Statista, Statista Inc., 19 Jul 2022, https://www.statista.com/statistics/1066007/leading-banks-ranked-return-on-capital-europe/
The Banker, Returns on capital of the European banks with the highest market capitalization in 2021 Statista, https://www.statista.com/statistics/1066007/leading-banks-ranked-return-on-capital-europe/ (last visited September 01, 2024)
Returns on capital of the European banks with the highest market capitalization in 2021 [Graph], The Banker, July 19, 2022. [Online]. Available: https://www.statista.com/statistics/1066007/leading-banks-ranked-return-on-capital-europe/