There is a sea of acronyms to measure profitability. Some are more widely known in the industry, such as ROE, ROTE or ROA. However, the more r’s they have, the more complicated things get (RORWA, RAROC, RORAC, RARORAC). But, which ratio is the most reliable to measure a bank’s profitability? Let’s go over each one of them to understand their meaning and apply the most appropriate one in each case.
Carlos Torres Vila presented BBVA’s 2018 earnings in his first press conference as chairman of the bank. He stressed that the “positive results” were sustained by recurring revenues, cost containment efforts and the strength of the Group’s diversified business model. During the presentation, he also addressed the news published in some media outlets regarding services provided by Grupo Cenyt. The chairman made appeals not to “prejudge” the alleged news and to let the BBVA investigation “do its job”, which will be conducted with “rigor, diligence, and thoroughness” in order to shed light on the facts. In addition, he made assurances that “BBVA has been, is, and will continue to be an honest bank”
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