Banking · Financial Ratios
Which of the following actions represents a strategic decision primarily aimed at improving a bank's Return on Equity (ROE) without necessarily improving its Return on Assets (ROA)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Increasing the interest margins by raising lending rates on all retail loans
- 2Increasing the bank's leverage by raising more debt relative to its equity base✓
- 3Improving the recovery rate on Non-Performing Assets (NPAs)
- 4Reducing operational expenses across all physical branches by 10%
Correct answer
Increasing the bank's leverage by raising more debt relative to its equity base
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