Work out cost to income ratio instantly with clear inputs, formula shown and shareable results.
Cost to income measures operating expenses against total operating income, the standard efficiency yardstick for a bank. What remains is pre-provision operating profit, the buffer available to absorb credit losses before capital is touched.
Cost to income
Ratio = operating expenses / (net interest income + other income)
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
Below 50% is strong for a universal bank; digital-only models target considerably lower.
It is the first line of defence against credit losses — a thin buffer means provisions quickly become capital losses.