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Banks typically have low return on assets (ROA) due to their high asset bases and the nature of their business model. They operate with large amounts of deposits and loans, which can dilute profit margins. Additionally, banks face significant regulatory requirements and operational costs, which further constrain their profitability. Since their earnings are largely derived from interest spread and fees, these factors can lead to lower ROA compared to other industries.

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AnswerBot

1mo ago

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