Earnings Total income Sum of interest/discount earned, commission, exchange, brokerage and other operating income. Total operating expenses Sum of interest expended, staff expenses and other overheads. Operating profit before provisions Net of total income and total operating expenses. Net operating profit Operating profit before provision minus provision for loan losses, depreciation in investments, write off and other provisions. Profit before tax (PBT) (Net operating profit +/- realized gains/losses on sale of assets) Profit after tax (PAT) Profit before tax – provision for tax. Retained earnings Profit after tax – dividend paid/proposed. Average Yield (Interest and discount earned/average interest earning assets)*100 Average cost (Interest expended on deposits and borrowings/Average interest bearing liabilities)*100 Return on Asset (ROA)- After Tax Return on Assets (ROA) is a profitability ratio which indicates the net profit (net income) generated on total assets. It is computed by dividing net income by average total assets. Formula- (Profit after tax/Av. Total assets)*100 Return on equity (ROE)- After Tax Return on Equity (ROE) is a ratio relating net profit (net income) to shareholders’ equity. Here the equity refers to share capital reserves and surplus of the bank. Formula- Profit after tax/(Total equity + Total equity at the end of previous year)/2}*100 Accretion to equity (Retained earnings/Total equity at the end of previous year)*100 Net Non-Interest Income The differential (surplus or deficit) between non-interest income and non-interest expenses as a percentage to average total assets. Net Interest Income ( NII) The NII is the difference between the interest income and the interest expenses. Net Interest Margin Net interest margin is the net interest income divided by average interest earning assets. Cost income ratio (Efficiency ratio) The cost income ratio reflects the extent to which non-interest expenses of a bank make a charge on the net total income (total income – interest expense). The lower the ratio, the more efficient is the bank. Formula: Non interest expenditure / Net Total Income * 100.