Cost-to-income

How efficiently the bank runs.

The cost-to-income ratio shows how much a bank spends to earn its income, a direct measure of operating efficiency. Lower is better: it means more of each rupee earned drops to profit. Cost-to-income = Operating costs ÷ Operating income × 100 Operating costs Rs 40, operating income Rs 100. Cost-to-income = 40%. Clear efficiency gauge Comparable between banks Tracks cost discipline Very low can mean under-investment Income mix affects it One period can mislead

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: Banks.