Essay on Banks’ Performance Analysis
The DuPont framework is an important analytical tool for evaluating the effects of various
financial and operational factors on banks’ Return on Equity (ROE).
a. Based on the theoretical DuPont model, explain three (3) strategies that banks can
adopt to increase their ROE. Elaborate any risk implications or shortcomings
associated with each strategy.
Guide: 300 words, 6 marks.
b. Find annual (yearly) data to calculate and graph Return on Equity, Return on Assets,
and Leverage Multiplier for the top four Australian banks over 2015-2020.
Based on your graphs, conduct trend and peer analyses for each of the three ratios, and
provide insights into these banks’ operational, investment, and funding strategies. These
insights must be based on in-depth research into the banks’ annual reports or media
Guide: 500 words, 10 marks. You must provide three (3) graphs, one for each ratio.
Your graphs must be presented in the main text of the essay together with the
discussion, while your data and calculated ratios must be shown in the appendix.
Note: Appendices are not included in the word limit.
c. Can you forecast the future trend in ROE for Australian banks given the current
economic climate? Give reasons to support your answer.
Guide: 200 words, 4 marks.
Note: Approximately 200 words are recommended for introduction and conclusion
together. Subheadings should be used to separate parts a, b and c.
Suggested data source for part (b): FitchConnect database (access via Monash library
database website), or banks’ annual reports published on their website.
Instructions to students
You are required to retain a copy of the assignment until results are finalised.
Any query by email must be sent from your Monash student email address
<Your.Name>@student.monash.edu. Any other email addresses will not be accepted.
Work submitted for assessment must be consistent with the guidelines set down in the Q
Manual, which is the faculty’s student guide for producing quality work on time. Copies of
this manual can be accessed online at:
Chapter 3 of the Q-Manual provides instructions on how to properly cite and list references
for an assignment.
Faculty style guide
Work submitted for this assessment must follow the ESSAY style as outlined in the Faculty
Estimated return date
Assignment marks and feedback will be available on Moodle at the end of Week 11.
In order to ensure the academic integrity of your submission and to deter others from copying
your work, your submission may be processed by text matching software such as Turnitin.