On this page is a bank efficiency ratio calculator. Enter the bank's non-interest expenses and total top-line revenue (or optionally, revenue net of loan-loss provisions) to compute its efficiency ratio.
Efficiency Ratio Calculator
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What is the efficiency ratio?
A bank's efficiency ratio is an at-a-glance measure which shows you how a bank is converting its non-investment costs into total revenue. Ideally, this number should be as low as possible, which would mean a bank is generating much more in revenue than its non-investment input costs.
Efficiency Ratio Formula
The efficiency ratio formula is:
efficiency\ ratio=\frac{non-interest\ expenses}{revenue}Where:
- Non-Interest Income – Non-interest or non-investment revenue reported by the bank.
- Revenue – The top-line revenue of the company, or more accurately use the revenue net of any provisions for loan losses.
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