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Bank and Business Performance Measurement
Author(s) -
Turnbull Stuart M.
Publication year - 2002
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/1468-0300.00085
Subject(s) - shareholder , return on assets , return on equity , equity (law) , business , performance measurement , metric (unit) , return on capital , measure (data warehouse) , finance , economics , computer science , microeconomics , profit (economics) , marketing , corporate governance , financial capital , capital formation , law , database , profitability index , stock exchange , political science
Given the objective of maximizing the wealth of existing shareholders, this paper discusses some of the issues that arise in attempting to measure the performance of individual businesses within a bank. The paper describes two return measures – return on assets within a business and the return on the ‘equity’ of an individual business – and discusses the appropriate bench–marks. The paper ends with a discussion of the cost of unused allocated capital and the appropriate performance metric. (J.E.L.: G30, G31).