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Compendium of 50 Most Useful KPIs for the Financial Services Sector

Writer's picture: Dr. MarvilanoDr. Marvilano

 

These KPIs offer insights into the financial health, performance, and risk exposure of various entities within the financial services sector.

 

1.      Active Users (Financial Technology Firms): The number of users actively engaged with financial technology platforms or services.

 

2.      Alpha (Investment Industry): A measure of an investment's performance relative to its benchmark, indicating the excess return generated.

 

3.      Annuity Surrender Rate (Insurance Industry): The percentage of annuity policyholders who surrender their policies before maturity.

 

4.      Assets Under Management (AUM) (Asset Management): The total market value of assets managed by an investment firm on behalf of clients.

 

5.      Average Cost Per Trade (Brokerage Firms): The average cost incurred by a brokerage firm for executing a single trade.

 

6.      Average Trading Value (Brokerage Firms): The mean value of securities traded over a specific period.

 

7.      Basel III Ratios (Common Equity Tier 1 (CET1), Tier 1 Capital Ratio, and Total Capital Ratio): Regulatory capital adequacy ratios set by Basel III to ensure financial institutions maintain sufficient capital.

 

8.      Beta (Investment Industry): A measure of a security's risk in relation to the market, indicating its sensitivity to market movements.

 

9.      Claims Ratio (Insurance Industry): The ratio of insurance claims paid out to the total premiums collected.

 

10.  Claims Settlement Ratio (Insurance): The percentage of insurance claims settled by an insurance company against the total claims received.

 

11.  Combined Ratio (Insurance Industry): The sum of the loss ratio and expense ratio in the insurance industry, indicating the profitability of underwriting activities.

 

12.  Combined Ratio (Insurance): Similar to the above, representing the total incurred losses and expenses as a percentage of earned premiums.

 

13.  Cost-to-Income Ratio (CIR): The ratio of operating costs to operating income, indicating operational efficiency.

 

14.  Credit Card Charge-Off Rate (Consumer Financial Services): The percentage of credit card balances that a lender writes off as a loss due to non-payment.

 

15.  Default Rate (Lending): The percentage of loans that borrowers fail to repay.

 

16.  Dividend Yield (General): The annual dividend income earned by an investor relative to the market price of the investment.

 

17.  Duration Gap (Banking): The difference between the durations of a bank's assets and liabilities, measuring interest rate risk.

 

18.  Earnings per Share (EPS): The portion of a company's profit attributed to each outstanding share of common stock.

 

19.  Expense Ratio (Mutual Funds/Asset Management): The percentage of a mutual fund's assets used to cover operating expenses.

 

20.  Fee Income to Total Income (Banking): The proportion of a bank's total income derived from fees.

 

21.  Funds from Operations (FFO - REITs): A measure of cash generated by real estate investment trusts (REITs), excluding gains or losses from property sales.

 

22.  Incurred Loss Ratio (Insurance): The ratio of incurred losses to earned premiums, providing insights into underwriting profitability.

 

23.  Insurance Expense Ratio: The ratio of insurance operating expenses to earned premiums.

 

24.  Insurance Loss Ratio: The ratio of incurred losses to earned premiums, assessing the financial performance of an insurance company.

 

25.  Interest Rate Spread: The difference between interest earned on assets and interest paid on liabilities.

 

26.  Leverage Ratio (Banking & Investment Industry): A measure of a firm's capital adequacy, comparing its capital to its total assets.

 

27.  Liquidity Coverage Ratio (LCR): A regulatory requirement ensuring that financial institutions have enough high-quality liquid assets to cover short-term obligations.

 

28.  Loan Loss Reserves to Non-performing Loans: The ratio of reserves set aside for potential loan losses to the total value of non-performing loans.

 

29.  Loan-to-Deposit Ratio (LDR): The ratio of a bank's loans to its deposits, indicating lending activities.

 

30.  Loss Ratio (Insurance): The ratio of losses incurred to earned premiums, providing insights into underwriting profitability.

 

31.  Net Interest Margin (Banking): The difference between interest earned and interest paid, expressed as a percentage of interest-earning assets.

 

32.  Net Interest Margin (NIM): Similar to the above, indicating the profitability of a bank's lending and investment activities.

 

33.  Net Stable Funding Ratio (NSFR): A regulatory requirement ensuring banks have stable funding sources to support their activities.

 

34.  Non-interest income to total income (Banking): The proportion of a bank's total income derived from non-interest sources.

 

35.  Non-Performing Loan Ratio (NPL Ratio): The ratio of non-performing loans to total loans, indicating asset quality.

 

36.  Overhead Ratio (General): The proportion of total operating expenses to total revenue, indicating operational efficiency.

 

37.  Persistency Ratio (Insurance Industry): The percentage of insurance policies that remain in force over a specific period.

 

38.  Premium to Surplus Ratio (Insurance Industry): The ratio of an insurance company's premiums to its surplus, measuring risk exposure.

 

39.  Provision for Loan Losses to Loans: The percentage of loans set aside for potential losses, reflecting a bank's assessment of credit risk.

 

40.  Reserve Ratio (Insurance Industry): The ratio of an insurance company's reserves to its liabilities, assessing financial stability.

 

41.  Return on Investment (ROI) (Asset Management): The profitability of investments made by an asset management firm.

 

42.  Risk-Adjusted Return on Capital (RAROC): The return on capital adjusted for the level of risk taken.

 

43.  Risk-Weighted Assets (Banking): The total value of a bank's assets adjusted for risk, used in regulatory capital calculations.

 

44.  Risk-Weighted Assets (Banking): Similar to the above, reflecting the weighted value of a bank's assets based on their risk.

 

45.  Sharpe Ratio (Investment Industry): A measure of the risk-adjusted performance of an investment.

 

46.  Solvency Ratio (Insurance Industry): The ratio of an insurance company's capital to its risk exposure, assessing financial stability.

 

47.  Solvency Ratio (Insurance): A measure of an insurance company's ability to meet its long-term obligations.

 

48.  Total Brokerage Accounts (Brokerage Firms): The total number of accounts held with a brokerage firm.

 

49.  Trading Volume: The total number of shares or contracts traded in a specific period.

 

50.  Turnover Ratio (Mutual Funds/Asset Management): The percentage of a mutual fund's holdings that have been replaced in a given period.

 




 

 

 

 

 
 

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