Start with a small group of banks and one financial year. This guide explains the figures, shows how to interpret their relationships and then connects the comparison to Aksion's bank data.
Choose what the comparison needs to answer
Different questions call for different measures. To compare business scale, start with assets and customer deposits. To understand profitability, look at income, expenses, profit and the resources used to earn it. To examine funding, read lending and deposits together.
A ranking answers a narrower question. Being first by assets means having the largest recorded asset balance in the selected group and year. It does not establish the best service, strongest loan quality or highest return. Keep the question visible while reading the figures, so that a size ranking does not quietly become an overall judgment.
Make the financial periods comparable
A balance sheet describes the bank at a particular date. Assets, deposits, lending and equity are balances at that date. An income statement describes activity over a period: the income earned, expenses incurred and profit reported during the year.
Choose a financial year available for every bank being compared. A result announced in a later calendar year still belongs to its financial reporting period. Also distinguish the bank's own statements from consolidated statements that include subsidiaries. A larger group and a standalone bank can cover different businesses.
Read the scale on any original statement before entering an amount. A figure expressed in thousands of birr is not the same amount as the same printed number expressed in millions. Aksion's views identify the selected year; opening a profile lets you follow the bank's available history.
Understand the main amounts before using ratios
Assets are resources recorded by the bank, including lending and other assets. Customer deposits are money the bank owes its depositors. Loans and advances show the recorded lending balance. Paid-up capital is shareholders' contributed share capital; total equity also reflects other components such as reserves and retained earnings.
Profit before tax measures the reported result before income tax. Profit after tax measures the result after that expense. Keep the two separate when comparing banks or years. A change in tax expense can change after-tax profit even when pre-tax profit moves differently.
These amounts establish the scale of the business. Ratios then ask how the amounts relate to one another.
Use returns to explain what size alone misses
On Aksion, pre-tax ROA divides profit before tax by year-end total assets. Pre-tax ROE divides the same profit measure by year-end total equity. Multiplying each result by 100 expresses it as a percentage. Other publications can use after-tax profit or average balances, so match the calculation before comparing their percentages.
Consider two fictional banks. Bank A has ETB 100 billion in assets, ETB 10 billion in equity and ETB 2 billion in pre-tax profit. Bank B has ETB 50 billion in assets, ETB 15 billion in equity and ETB 1.5 billion in pre-tax profit.
Bank A reports the greater profit amount. Bank B earns more pre-tax profit per birr of year-end assets: 3% against 2%. Bank A has the higher return on equity because its profit is measured against a smaller equity base. The different rankings explain different relationships; neither percentage settles the comparison by itself.
| Measure in this illustration | Bank A | Bank B |
|---|---|---|
| Pre-tax profit | ETB 2 billion | ETB 1.5 billion |
| Year-end assets | ETB 100 billion | ETB 50 billion |
| Year-end equity | ETB 10 billion | ETB 15 billion |
| Pre-tax ROA on closing assets | 2% | 3% |
| Pre-tax ROE on closing equity | 20% | 10% |
Read lending growth beside the funding base
The loan-to-deposit ratio divides recorded loans and advances by customer deposits. It shows the relationship between these two balances. If lending grows faster than deposits, that relationship changes and the bank's other funding sources become more relevant.
The ratio does not reveal when deposits may leave or when loans will be repaid. It also does not establish loan quality. A bank can expand its loan book while its repayment risks change, which is why lending growth and credit quality need separate attention.
For growth, compare adjacent years on the same basis. If profit rises from ETB 1 billion to ETB 1.2 billion, the increase is ETB 200 million, or 20%. If the earlier result was a loss, describe the change in birr before trying to summarize it as ordinary percentage growth.
Build a comparison you can explain
Choose two or three banks, select a common year and write down assets, deposits, lending, equity and profit. Add the ratios that answer the question you started with. Then follow the largest differences into each bank's profile and, where needed, its financial statement explanations.
A useful conclusion connects a result to its cause: one bank earned more per birr of assets, another held more equity relative to its size, or lending grew faster than deposit funding. This is more informative than declaring one bank best because it leads a single column.