Banking KPI’s include certain metrics that are quantifiable and specific. They can be categorized to six classifications, such as income metrics, cost metrics, company asset metrics, investment metrics, interest margin metrics, and risk metrics.

KPI’s or key performance indicators are metrics used to measure the progress of an organization towards the attainment of its goals. These metrics can be financial or non-financial in nature. Customer satisfaction has been a common metric used by businesses. This can also be metric used in the financial industry.

If many customers are satisfied by a business, it literally means good progress for the business. However, seeing and knowing your customers are satisfied with your product or service is not enough. It is also important for a business to have statistical or mathematical information with regards to customer satisfaction.

The progress of an organization can be determined not just on the data inscribed on financial statements. Management must also present measures that show the performance and progress of the organization.

The metrics, such as key performance indicators, are used more commonly to assess the performance of a company on different areas and activities. The metrics as mentioned above can be broken down to various measurements.

In the income metrics category, a company can measure the performance of its income through the following measurements: gross profit, non-interest incomes level, fee income level, and interest spread.

The gross profit is a common component in an income and expense statement of businesses. It is computed by deducting the cost of sales to sales.

The fee income level in the case of service-oriented businesses can be derived by dividing the operating income to the fee income. On the other hand, non-interest income divided by operating income results to non-interest income level.

Computing for the interest spread involves a complex equation. To derive the interest spread amount, the interest income is divided by interest earning sales. The result of the first equation is deducted to the ratio of interest expense and interest bearing liabilities.