The bank reported its best pretax quarterly earnings in a decade on Monday, but a decent return on equity remains a long way off.
Return on equity at the nation’s lenders and investment banks remains too low, and banks need to try something new.
After several quarters of more than 20 percent returns on equity, UBS’s broker-dealer business squeezed out a 4.4 percent return in the quarter that just ended.
Bank of America will have to find a lot more in earning or do even more cost-cutting to increase its return on equity, Antony Curries writes in Reuters Breakingviews.
Return on equity remains subpar; without some one-time extras, the bank’s core earnings would need to rise almost 40 percent to exceed its cost of capital.