Pretax rate of return

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Pretax rate of return

Gain on a security before taxes.

Pretax Rate of Return

The rate of return on an investment before capital gains or other taxes. Most of the time, when one sees a calculation of the rate of return it is the pretax rate of return. For a tax-free investment, the pretax and post-tax rates of return are identical.
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S&P Global Market Intelligence ranked the best-performing US community banks based on six core financial performance metrics for the 12-month period ended December 31, 2018: pretax return on average tangible common equity, net charge-offs as a percentage of average loans, efficiency ratio, adjusted Texas ratio, net interest margin and loan growth.
Its return on equity and pretax return on assets averaged 18% and 12%, respectively, over the three years to end-June 2018, while the non-life combined ratio averaged 83%.
The ratings upgrade is based on the company's strong underwriting and operating performance over the past several years as reflected by combined ratios and pretax return on revenue measures that outperformed the composite on both a five- and 10-year basis.
Longer term, the Company remains committed to achieving both Adjusted EBITDA margin and pretax return on capital employed of greater than 20%.
The community banks making the top 100 were ranked using six core financial performance metrics: pretax return on average tangible common equity, net charge-offs as a percentage of average loans, efficiency ratio, adjusted Texas ratio, net interest margin on a fully taxable equivalent basis and loan growth.
During the third quarter of 2014, the median pretax return on revenue dropped to 1.5 percent, from more than 4 percent in the third quarter of 2013.
From 2007 through 2011, the average pretax return on equity for community banks nationwide deteriorated to 13.3 percent at year-end 2007, turned negative in 2009 at -2.8 percent, and rebounded to a low but positive 8.4 percent by year-end 2011.
Pretax return on equity stood at 21.4 per cent whereas pretax return on assets was 2.2 per cent.
"Measured against the capital Target has invested in this segment, we delivered an annualized pretax return of just over 28%, ahead of the very strong 20% we enjoyed in the second quarter last year," he pointed out.
RBI, which was created by the merger of Austrian Raiffeisen Zentralbank and its subsidiary Raiffeisen International (WBAG:RIBH), reported an improvement in pretax return on equity of 3.7 percentage points to 9.8% for January to September 2010.
The size of the tax-deferral benefit depends on the growth rate of the assets and their tax efficiency (the percentage of pretax return the investor pockets after taxes).
With a portfolio tilted toward growth, using a pretax return of 7% to 9% is a safe assumption.