All this credit was great for big banks — whose return on equity rose in tandem with their leverage.
By early 2006, three months after it was set up, shareholder equity rose to $58 million, a return of nearly 17 percent.
With property values and home equity rising rapidly, virtually all homeowners had more than $20,000 in equity, so homes could be sold to pay off credit-card debt.
Between 2002 and 2008, L&T rode the infrastructure boom, and its return on equity rose.Lately returns have slipped (see chart).
The bank said its core Tier 1 equity ratio, a measure of a bank's ability to weather financial shocks, stood at 11.7 percent last year, a slight decline from 2011, while its return on equity rose to 12.8 percent.
After noting that shareholder equity rose $5 billion in the fourth quarter of 2003, when five-year interest rates rose 0.4 percentage points, she pointed out that rates have risen 0.9 percentage points so far this quarter.
Return on average equity rose more than one percentage point, to 13%.
Earnings for Fortune Brands' second quarter nearly doubled, to $1.27 cents per share, and return on equity rose to 21%.
During that same period, earnings per share increased 19%, and return on equity rose 15%, with scant leverage.
The GINI coefficient, a measurement of economic equity, rose dramatically while she was in office.
