Performance management is all about working out what you need to measure and how often you need to monitor it. Effective performance management enables better decision making, leading to improved management of the business.
The bank efficiency ratio, also known as the cost/income or expense ratio, is an important element in performance management. Best measured on a monthly basis, this ratio provides a good indicator of how profitable a financial institution is, and monitored over a series of months gives insight into the profitability trends of the business.
This eBook includes:
• The efficiency ratio calculation
• Why is the efficiency ratio important?
• What do the results of the efficiency ratio indicate?
• How to analyse the efficiency ratio
• Breaking the efficiency ratio down for analysis purposes
• Dashboards and reports to support analysis of the efficiency ratio