Evaluation of SunTrust Bank - Case Study Example

This may be attributed to negative financial drivers in the market such as adverse economic cycles leading to lower Returns on equity. However, it can be scrutinized that Returns on Equity were higher in 2011 as compared to 2010. This is a positive indication that the management was performing considerably well. The positive drivers for higher returns on equity could be attributed to the ability of the company to employ investor’s capital to make more returns. The risk analysis section indicates that the ability of the company to set off short term debt was compromised in 2011 by higher loans commitments and subsequent losses.

However, the total real estate loans to equity ratio were substantially lower in 2011 than all the previous years. This indicates that the company strength to offset long-term debts has been increasing progressively. Additionally, the liquidity ratio for the year 2011 was 8.11%, while in 2010 the ratio stands at 2.61%. This means that the position Unit Trusty Company to offset shorter debts was substantially higher in 2011 than in 2010. Connectively, the total risk based on capital was substantially higher in 2011 as compared to the rest of the periods. . he financial statements of Sun Trust Bank reported a total asset of one hundred and seventy three million dollars as at 31st December 2012(SunTrust Para-1).

Additionally, the company was reported to be one of the leading holding companies with numerous subsidiaries in different parts of the world (SunTrust Para-2). In above connection, the company had one thousand, six hundred retail subsidiaries located in Georgia, Florida, North Carolina, Tennessee, West Virginia to name just but a few (SunTrust Para-4). The company provides variety of services to its clients, some of the services provided include: brokerage, investiment management, insurance and banking such online are banking (SunTrust Para-4).

Therefore, this report aims to provide comprehensive analysis of Sun Trust Bank financial ratios in order to determine its strengths, weaknesses, opportunities and threats. The report will take into consideration the most current ratios for 2011 and compares them with those of the previous year’s ie2006, 2007, 2008, 2009, and 2010. An Evaluation of the bank’s Profitability Below is a small table indicating profitability ratios for the five periods Years December 2006 December 2008 December 2009 December 2010 December 2011 Profitability Ratios(ROE) 11.30% 4.98% -8.41% -0.18% 3.

30% Profitability Ratios(ROA) 1.19% 0.57% -0.93% 0.02% 0.85% Net Interest Margin 3.03% 3.21% 3.03% 3.39% 3.54% Efficiency Ratios 55.81% 65.64% 80.29% 69% 69.15% Source: Author Profitability ratio Analysis Based on the figures above be scrutinized that the returns on equity ratio for 2006 and 2008 were 11.30% and 4.98% higher than in 2011 which stand at 3.30%. This indicates that in 2006 and 2008, equity stock holders of Unit Trust Company were able to obtain higher returns on the investment than in