Let's have a look at some of the key performance measures for banks.

The key measure for commercial banking operations is the net interest margin, which is calculated by dividing the bank's net interest income, which is interest income less all interest expense, divided by the bank's average interest-bearing assets, typically calculated as the average of the opening and closing interest-bearing asset position.

The metric measures how efficient a bank is at generating income from its loan portfolio while incorporating the direct cost associated with financing the loans. The net interest margin can be calculated either before or after the allowance for credit losses expense for the year.

It's worth noting that the allowance for credit losses in the income statement is based on expected losses rather than incurred credit losses.

This is a crucial metric since these interest-bearing assets sit on the bank's balance sheet, and as a result, the bank has to hold regulatory capital to cover the risk of losses from these assets. So the net interest margin can help indicate whether the returns on the loans will be sufficient to cover the cost of holding the necessary regulatory capital.

For a bank's fee income, a key performance metric is the year-on-year growth rate.

This allows analysts to determine how these have changed over time, but it's also worth considering the drivers of these fee lines to gain a better understanding of the reason for the fee income growth rate.

For investment banking advisory fees, analysis of deal volume would help indicate changes in fee income per deal.

Similarly, for trade execution, a comparison against the volume of trades would provide more color to the changes in the fee income growth rate. And for asset and wealth management, the level of assets under management, as well as the change in management fee rates, will also help assess what has caused the change in fee income over the year.