Learn the stock market › Sectors › Lesson 1 of 6

Key numbers for banks

Short answerFor a bank, the numbers that matter are net interest income, return on equity and price-to-book, because a bank lends out money it has borrowed itself. Most of its revenue is interest, and its debts are part of the business. In the middle of the big US banks, net interest is 54.9% of revenue, return on equity 11.0% and P/B 1.4.

The big banks in numbers

Company	Net interest	Return	P/B
Citigroup	70.2%	6.8%	1.0
Wells Fargo	56.7%	11.8%	1.6
Bank of America	53.1%	10.2%	1.3
JPMorgan Chase	52.5%	16.1%	2.5
Middle of all 101 companies	–	22.5%	5.8

Net interest is the interest the bank earns minus what it pays, as a share of all revenue. Return is on equity. The middle is counted on the largest US companies. Latest fiscal year, price on Nov 6, 2026. A dash means the number is missing.

Net interest income is the interest a bank charges on its loans minus the interest it pays on deposits and its own borrowing. The rest of its revenue is mostly fees for cards, funds, trading and advice.

Why a bank looks different

Little equity. The equity ratio is 8.4% in the middle of the banks, against 36.2% for the 101 largest companies. Customers' deposits are a debt for the bank, so the business itself makes its debts large. How a bank's buffers are measured instead is in the lesson on the equity ratio.

No operating profit. Sales, operating margin and EBITDA say little about a bank, because interest is both its income and its cost. That is why banks are left out of the price-to-sales, margin and debt tables in the key ratios course.

P/B and return go together. A bank's assets are mostly loans and securities, carried close to what they are worth, so price-to-book is a common measure for banks. A bank that earns more on each dollar of equity usually trades at a higher multiple of it. So P/B is read together with return on equity.

What the table does not show

Loan losses, the loans that are never paid back, are small in most years and can be large in a crisis. One year cannot show how large they can get. Net interest also follows rates: when rates rise, banks usually earn more on their deposits, and when they fall it shrinks. How the market has taken rate decisions is in the lesson on interest rates, and why banks often move on the same day in the lesson on when a whole sector moves.

Test yourself

Two banks have the same return on equity. One trades at P/B 1 and the other at P/B 2. What does that tell you?