Based on the information provided below about banks 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).
a. Bank A has net profit after taxes of $1.8 million and the balance sheet below:
Bank A
(in millions)
Assets Liabilities
Reserves $5 Deposits $100
Loans $70 Borrowing $10
Securities $45 Bank Capital $10