Leading European banks ranked by return on capital 2019

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. Banco Santander was the European bank with the highest ROC in 2019, based on a ranking of the largest banks in terms of tier 1 capital.

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 2020, HSBC had the highest amount of pre-tax profit of any bank in Europe with almost 10 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 2020 had almost 2.5 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.