A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Banks that are losing money, however, are less able to do those things.
Sallie Mae Bank beat the national average on Bankrate's earnings test, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Sallie Mae Bank was 14.50 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $317.3 million on total equity of $2.35 billion. The bank reported an annualized return on average assets, or ROA, of 1.60 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.