Individual Assignment: Financial Analysis of Westpac and NAB Banks

This report presents a financial analysis of Westpac Banking Corporation and National Australia Bank (NAB) for the period of 2014-2018. The analysis begins with an executive summary and table of contents, followed by an introduction outlining the report's objectives: to analyze the return on equity (ROE) decomposition, credit risk exposure, and liquidity and operational risk ratios of both banks, comparing them on a standalone basis and against each other. The discussion section delves into the 5-way DuPont analysis to decompose ROE, examining tax burden, interest burden, operating profit margin, equity multiplier, and asset turnover. It assesses the credit risk exposure and mitigation strategies employed by each bank, comparing their approaches. The report then evaluates liquidity and operational risk ratios, including the current ratio and operating efficiency ratio, providing a comparative assessment of their performance over the trend period. The document includes references and appendices with detailed ratio analyses for both banks, including the calculation of various financial metrics and the analysis of their trends, providing a comprehensive overview of the banks' financial health and risk management strategies.