Definition of ROTE

ROTE

Return on tangible equity - a version of ROE - net profit as a percentage of tangible equity (usually average tangible equity). Tangible equity is equity (or net assets) less intangible assets such as goodwill.

Break down the jargon barrier further with our Finance Essentials for Banks – Online Course (Learn about how banks make money, how they create value for their shareholders and the key concerns for bank management and regulators. You will see how the balance sheet and income statement work for a bank and you’ll understand key financial jargon and commonly used financial metrics such as ROE, cost:income ratio, leverage and net interest margin.  We will also cover bank capital regulation, including risk-weighted assets, CET1 and leverage ratios and the rules for too-big-to-fail banks. And we consider current trends, the implications for profitability and the challenges facing banks.)