A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Sovereign Bank scored 16 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Sovereign Bank was 7.38 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $4.7 million on total equity of $130.0 million. The bank experienced an annualized return on average assets, or ROA, of 0.90 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.