Economics · Bank Profitability

Profitability analysis at the branch level involves multiple parameters. Consider the following statements: Statement I: The Return on Equity (ROE) of a branch is primarily a function of its Net Profit and the specific capital allocated to it by the Head Office based on its risk-weighted assets. Statement II: The break-even point for a branch is the level of business where the total interest spread exactly equals the total non-interest income. Statement III: A decrease in the 'Cost-to-Income' ratio is a clear indicator that the branch's operational efficiency is improving, often through better management of non-interest expenses. Statement IV: The 'Capital Charge' for a branch decreases when it shifts its lending focus from highly rated corporate borrowers to unsecured personal loans. Statement V: Digital transaction fees are a component of non-interest income that can help a branch offset the high 'Burden'. Which of the statements given above are correct?