Sunday, 8 November 2026 Weekly snapshot · Not investment advice standard-equity.report
Banks
Efficiency Ratio
Non-interest expense as a percentage of revenue before loan losses. Lower is better.
Definition
The efficiency ratio (cost-to-income) measures how much a bank spends to generate each dollar of revenue. Loan-loss provisions are left out: they are a credit cost, not an operating one. Lower is better.
Formula
(Non-Interest Expense ÷ Revenue before Loan Losses) × 100
Why it matters
Efficiency ratio is the bank-sector measure of operating discipline. Below 50% is excellent; 50–60% is industry-typical; above 70% indicates a bank struggling to control costs against its revenue base.
How Standard Equity uses it
Substituted for operating margin in bank reports. Lower numbers display as better-performing.
The metric
| Category | Banks |
|---|---|
| Unit | % |
| Applies to | Banks only |