Glossary
What is the cost-to-income ratio?
Definition
The cost-to-income ratio is a bank's operating expenses divided by its operating income (total net revenue at US banks), the sum of net interest income and non-interest income. It shows how much of that income goes on running costs. For example, JPMorgan Chase's cost-to-income ratio for FY2025 was 52.4%, our calculation from its Form 10-K.
Formula
Cost-to-income ratio = Operating expenses ÷ Total net revenue
The cost-to-income ratio divides operating expenses by total net revenue and shows the result as a percentage. Operating expenses are the bank's running costs, such as staff, premises and technology. They leave out the provision for credit losses. At US banks such as JPMorgan Chase, operating income is labelled total net revenue: net interest income plus non-interest income, the bank's top line.
Both inputs come from the income statement, which shows a period's revenue and the costs of earning it.[1] Many US banks report a similar measure as the efficiency ratio, and JPMorgan Chase's overhead ratio divides noninterest expense by total net revenue. A second bank ratio, the loan-to-deposit ratio, uses the balance sheet instead.
Worked example: JPMorgan Chase
This example calculates the cost-to-income ratio from JPMorgan Chase's income statement for its latest fiscal year, from its Form 10-K. Total net revenue is the line printed after net interest income. The operating expenses line is the one the bank prints as total noninterest expense, after the provision for credit losses.
To get the ratio, divide operating expenses by total net revenue and show the result as a percentage. The JPMorgan Chase stock fundamentals page shows the ratio for the trailing 12 months (TTM) in its key facts. That figure can cover a later period than this example.
| USD m | FY2025ended |
|---|---|
| Total net revenue | 182,447 D |
| Operating expenses | 95,640 |
| Cost-to-income % | 52.4% |
Source: JPMorgan Chase Form 10-K for FY2025, SEC EDGAR
- D Total net revenue = net interest income + non-interest income, from the same filing.
Totals may not add up because of rounding.
All periods: JPMorgan Chase income statement
How StockFactsheet calculates it
StockFactsheet calculates the cost-to-income ratio from the bank's income statement lines as reported, with no adjustment for one-off items. For SEC filings, we build total net revenue from net interest income and non-interest income in the same filing. It therefore carries the D marker (derived by StockFactsheet). Banks that report under IFRS usually print the same total as total operating income.
The ratio we show is always our own calculation, even where a bank publishes an efficiency or overhead ratio. A TTM ratio divides TTM operating expenses by TTM total net revenue, a ratio of sums, never an average of quarterly ratios. Our bank tables show no operating margin; in them, this ratio is the measure that relates costs to income. The full rule is in our methodology for cost-to-income ratio.
Common mistakes
- Adding the provision for credit losses to the costs in a cost-to-income ratio: the provision moves with expected loan losses, so the result mixes credit costs with running costs.
- Treating a bank's own efficiency or overhead ratio as the same figure as ours: a bank can use adjusted figures or its own definition, so the figures can differ.
- Using net interest income alone as the income in a cost-to-income ratio: it leaves out fees, commissions and other non-interest income, so the result is not comparable with ours.
- Reading a change in the cost-to-income ratio as a change in cost control alone: the ratio also moves with business mix, investment spending and one-off items.
Sources and data
The references explain the term; the worked example's figures are as reported in the filings after them. Derived figures are our calculations (see Methodology).
(opens in new tab)- [1] Reference Beginners' Guide to Financial Statements
- [2] Filing Form 10-K, fiscal year ended 31 Dec 2025
- [3] Our dataset StockFactsheet fundamentals dataset, extracted from SEC EDGAR XBRL on ; derived values (Q4, TTM, free cash flow, net debt, margins, growth rates and ratios) are explained in Methodology.
Cite this page
StockFactsheet (2026). "What is the cost-to-income ratio?" Signed off by OffScriptBySami. Updated ; data as of . https://stockfactsheet.com/learn/cost-to-income-ratio/
For information only. StockFactsheet does not recommend buying, selling or holding any security. Figures can contain errors; always check the original filings. Full disclaimer
Update history
- Published First published version.