The next key income statement performance metric is the cost-to-income ratio, which can also be referred to as the efficiency ratio or expense ratio.

This is calculated by dividing the recurring operating expenses of the bank by its recurring operating income, which is the net interest margin plus non-interest income.

For banks, variable costs other than interest expense are typically low. So once the interest expense has been taken account of within the net interest margin, the ability of a bank to manage its operating expenses is a key driver of the overall profitability of the bank.

The ratio is most often analyzed on a recurring or adjusted basis. That is, after one-off non-recurring expenses have been adjusted for.

Key non-recurring expenses for banks include regulatory and legal settlements and unexpected loan losses. The cost-to-income ratio provides an insight into management's ability to control key recurring expenses, such as staff and IT costs over time, and also compared to other competitors in the sector.

Care must be taken when the term efficiency ratio is used, since an increase in this ratio means non-interest expenses are a greater proportion of the operating income, meaning the bank is operating on a less efficient basis.

Given the focus on equity rather than enterprise-level metrics, the growth in earnings per share based on recurring net income is a crucial summary metric for equity investors in a bank, since it can provide insight into the quality of earnings that the bank produces. Volatile EPS growth might indicate that the bank's performance is heavily impacted by the performance of financial markets, whereas more stable growth in EPS indicates more diversified income sources and more predictable future growth.

EPS also incorporates the impact of any share buybacks and is an important signal for future dividend policy. Which brings us onto the final metric, dividend per share growth.

Since banks are typically mature businesses with limited high return investment opportunities that would need funding, banks often pay out a significant proportion of their profits as dividends. This makes banks attractive investments for income-seeking investors, such as pension funds. As a result, many bank investors will look to the dividend per share growth as the key metric for whether the bank is performing well, and the bank's stock price will be sensitive to changes in the growth rate of the company's dividends.

Also, bear in mind that regulators can, in extreme situations, prevent or severely restrict banks from paying out dividends.

During the COVID pandemic, regulators introduced various caps or restrictions on banks' dividend payments to address the prolonged economic uncertainty and fears of liquidity stress.