What it measures
Return on equity (ROE) shows how much profit a company generates with the money shareholders have invested.
In one line: ROE = net income / average shareholders' equity. It is a percentage. If the period is shorter than a year, the figure is either annualised or left as a part-year number, so the period matters.
How to read it
Higher is better, provided the company is not just borrowing more. For banks, ROE is the main summary of profitability. In the latest posts, Mandiri filed 23.62% for nine months, BCA 23.9% and BRI 18.50% for the first half, on different period bases. ICICI Bank was 16.6% on an annualised quarter.
Where it misleads
The formula is not fixed. The denominator can be period-end equity, average of two points, or an average of monthly balances. The numerator can include or exclude minority interests. Two documents from the same company can therefore state different ROE for the same period. Leverage also inflates ROE: a bank that holds less capital shows a higher return on the same profit. Read it next to the capital ratio and P/B Ratio.
Worked example
Mandiri's Q3 2026 post shows both sides. The filed OJK-format table gives bank-only ROE of 23.62% for the nine months to 30 September 2026, up from 21.24% a year earlier. Mandiri's own investor presentation, covering the same period and the same bank-only entity, gives ROE of 21.6%, up from 19.0%. The deck states its formula: PATMI divided by year-to-date average monthly equity excluding minority interest. The filed statement does not disclose its formula. The gap is about 2.0 percentage points, from the post's own comparison.
Where to find it
Income statement for net income, balance sheet for equity, and the bank's ratio table.