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Writer's pictureDr. Marvilano

Compendium of 50 Most Useful KPIs for the Financial Services Sector


 

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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