A current industry analysis for the bank industry is a comprehensive assessment of the

competitive dynamics, trends, and challenges faced by financial institutions in the banking sector. It
helps stakeholders understand the position of individual banks relative to their competitors and
identify opportunities and threats in the market. Additionally, the global macroeconomic
environment is expected to impact banks' ability to generate income and manage costs, with varying
economic growth rates across countries. To determine the performance of the current industry
analysis for the bank industry, there are several key aspects that can highlight its performance. Such
as Net Interest Margin (NIM) which is used to indicate a bank’s profitability where a higher NIM
indicate a better performance. The second key aspect is Return-on-asset (ROA) ratio which measure
the bank’s profitability in relation to its asset and is a key financial metric used to evaluate the
efficiency and performance of a bank where a higher ROA ratio indicates a better performance. The
third key aspects is Net charge-offs which measure of the overall health of a bank's loan portfolio, as
it indicates the amount of loans that are not collected or are lost due to default where lower net
charge-off rate indicates better performance1.

According to the table above which is a current industry analysis for bank industry that was
provided from FDIC Quarterly in their year-end report of 2022 shows the performance of bank
industry’s current analysis. The changes in NIM can be observed from the table above where from
the year 2021 to 2022 there is an increase for NIM from 2.54% to 2.95% showing an improvement in
the performance of bank industry. The increase of NIM can be resulted from by an effective cost
management where banks effectively manage their cost that can increase their net interest margin
by reducing their funds. Another factor that can increase NIM is lower funding cost where banks can

1
https://www.investopedia.com/articles/active-trading/082615/key-financial-ratios-analyze-retail-banks.asp
borrow money at a lower rate and would decrease their cost while increasing their NIM 2. Next is the
changes for ROA where in the year 2021 to 2022, there is a decrease in of ROA ratio which is from
1.23% to 1.12% showing a decline in the performance of bank industry. The decline of ROA ratio can
be resulted by over investment in assets where the bank has over invested on an asset that have
failed to produce revenue growth that is signalling potential financial problem 3. The changes in Net
Charges-offs can be observed from the table above where in the year 2021 to 2022 there is a slight
increase in Net Charges-offs which is from 0.25% to 0.27% showing a slight decrease in the
performance of bank industry. An increase in Net Charges-offs is resulted by deterioration in
borrower’s credit health where if the credit health of the borrowers deteriorates, it can lead to an
increase in the net charges-offs rate that can occur when borrowers are unable to meet debt
obligations. Another factor that can increase Net charges-offs is delinquent debt payments where
debt payments are delinquent for an extended period of time and due to these delays in debt
repayment can lead to the debt being deemed uncollectible, contributing to a higher net charge-off
rate4. Overall, the performance of the bank industry has improved over the past year.

A regular Individual Retirement Arrangement (IRA) or also known as a Traditional IRA allows
individuals to contribute pre-tax dollars or after-tax dollars with the money growing tax-deferred, and
withdrawals being taxed as current income after reaching the age 59½. On the other hand, a Roth
IRA involves contributing after-tax dollars with the money growing tax-free and generally allows for
tax- and penalty-free withdrawals after the age of 59½. Traditional IRA and Roth IRA have eligibility
requirements and annual contribution limits set by the Internal Revenue Service and individuals can
contribute to both IRA as long as the total contribution doesn't exceed these limit that has been set 5.
Given the data that has been collected, it can be concluded that the performance of the bank
industry is improving, an individual is better off using the Roth IRA where the individual will pay taxes
on contribution in the current time with a lower tax rate due to the increase in performance of bank
industry which can be beneficial for the individual rather than using a traditional IRA where the
individual would pay a possible higher tax rate than now6.

2
https://www.investopedia.com/terms/n/netinterestmargin.asp

3
https://learn.robinhood.com/articles/1dlJE4aHe2k8Elj2eBfuFN/what-is-return-on-assets-roa/

4
https://corporatefinanceinstitute.com/resources/commercial-lending/net-charge-off-nco/

5
https://www.investopedia.com/retirement/roth-vs-traditional-ira-which-is-right-for-you/

6
https://www.cnbc.com/select/traditional-ira-vs-roth-ira/