To lower the amount of capital relative to assets and raise the equity multiplier (that is ASSETS / EQUITY CAPITAL), do three things
(1) reduce the amount of bank capital by buying back some of the bank's stocks
(2) reduce the bank's capital by paying out higher dividends to its stockholders, thereby reducing its retained earnings
(3) keep bank capital constant but increase the bank's assets by acquiring new funds, say, by issuing CDs, and then seeking out loan business or purchasing more securities with these new funds.
To increase the amount of capital, do the reverse.
Equity multiplier:
EM = assets / equity capital
Return on assets (ROA) :
ROA = net profits after taxes / assets
Return on equity (ROE) :
ROE = net profits after taxes / equity capital
ROE = ROA * EM
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