First Bank Explainer: How is the bank’s return on average assets calculated?

Return on average assets (ROAA) is an indicator used to assess the profitability of a bank's assets, and it is most often used as a means to gauge financial performance. Sometimes, ROAA is used interchangeably with return on assets (ROA) although the latter often uses current assets instead of average assets.

The higher the return on average assets, the more this indicates the bank's efficiency in investing its assets to achieve appropriate profit levels.

ROAA is calculated by taking net profit and dividing it by average total assets then multiply by 100. The final ratio is expressed as a percentage of total average assets.

All banks operating in Egypt enjoy positive rates of return on average assets, due to their success in achieving net profits at varying levels while not incurring any losses which is a clear proof about the  strength and efficiency of the Egyptian banking sector.