### The world financial crisis

The ROE for HSBC for the four years is: 2010 is 9%, 2008 is 4%, 2007 is 6% and for 2007 is 14%.

This shows that the bank did quite well managing to have profit for the last 4 years compared to other banks and in 2010 they increased their return on equity capital to 9% percent which is the highest for the period. The Return on Assets (ROA) for 2010 is 0. 5% , for 2009 is 0. 2% and it is the same for 2008 and in 2007 it is 0. 8%.

The results show that the managers accomplished profit using successfully the assets of the bank. Still the best result is in 2007 but HSBC managed to get positive outcome for the last 3 years.The results are not the best having a decline in 2010 but are still constant for the whole period.

Never the less the amount of money the management has is low compared to other banks. The interest sensitive gap for HSBC for 2010 is -356081, for 2009 is -379847, for 2008 is -324862 and for 2007 is -263156 which mean that the bank has a negative gap for the period of four years. The results are not that good because the best option is to be around zero meaning that such a huge negative gap could again result in loss of money for the bank.The relative sensitive gap for HSBC for 2010 is -14%, for 2009 is -16%, for 2008 is -12% and for 2007 is -11%.

The results show that the bank is constant but it still needs to lower the gap between the interest sensitive assets and interest sensitive liabilities. The results for the banks are stable for the period with slight improvements in the recent couple of years meaning that they are having little more cash and reserves making them little more liquid than 2007.Equity Capital/ Total Assets for HSBC for the four year period are: 2010 it is 6%, for 2009 is 5%, for 2008 is 4% and finally in 2007 is again 5%. The results show that there is an improvement since 2008 and there is an increase in the equity funding meaning that there is a low risk for the banks shareholders and debt-holders. Comparison of the three banks Looking at the three banks HSBC, RSB and Lloyds TSB and their performance we can conclude that HSBC did a little bit better than its competitors especially in the profitability measures because HSBC turn in profit for the four year period.Again in the risk measures HSBC has the slight advantage having a better loans-to-deposits ratio than RSB and Lloyds TSB but still the bank needs to increase their provisions for loan losses in order to secure any bad debts.

HSBC and RSB are trying to set aside big reserves and cash in order to avoid any liquidity crunch. Lloyds TSB has the lowest amount of cash and reserves making them more prone to illiquidity.In the Gap analysis and interest sensitive ratio the advantage goes to RSB, they have a positive gap but it is much closer to the perfect zero than the other banks. Finally in the equity capital/ total assets ratio the results for the three banks are almost identical achieving a low risk state for their shareholders and debt-holders. If we observe closely we can see that there is major difference in the last 3 years compared to 2007 for all the banks. The huge factor behind this dissimilarity is the world financial crisis and the recession that followed around the world.