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Cost income ratio benchmarking in banking: a case study

Kurt Hess (Department of Finance, Waikato Management School, University of Waikato, Hamilton, New Zealand)
Graham Francis (Department of Accounting, Waikato Management School, University of Waikato, Hamilton, New Zealand)

Benchmarking: An International Journal

ISSN: 1463-5771

Article publication date: 1 June 2004

Abstract

This paper examines how ASB Bank, a New Zealand‐based retail bank, made use of cost income ratio benchmarking when reviewing its operational efficiency. In particular, it shows the difficulties associated with the benchmarking process in the sector and details the practical steps taken to obtain meaningful comparative information. It is interesting that, while the cost income ratio was the principal metric used in this benchmarking exercise, it sought to identify best practice not in terms of minimizing this ratio but rather in terms of identifying typical ratios and cost structures among successful banking institutions.

Keywords

Citation

Hess, K. and Francis, G. (2004), "Cost income ratio benchmarking in banking: a case study", Benchmarking: An International Journal, Vol. 11 No. 3, pp. 303-319. https://doi.org/10.1108/14635770410538772

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited