Quarterly cost-to-income ratio of the banking industry in the EU 2007-2024

The cost-to-income ratio (CIR) is a vital financial metric for evaluating bank efficiency, representing operational costs as a percentage of income. A lower CIR indicates higher profitability for a bank or banking sector. The European Union's banking industry experienced significant CIR fluctuations in recent years. In the first quarter of 2020, the COVID-19 pandemic triggered a peak CIR of 73.29 percent, the highest in the observed period, reflecting widespread economic disruption. As the EU economy stabilized in 2021, the banking sector saw marked improvement, with the CIR decreasing substantially. Throughout 2023, the CIR stabilized around 53 percent, indicating a return to more efficient operations. However, the last quarter of 2023 saw a slight increase to 53.7 percent, suggesting minor efficiency challenges. In the first half of 2024, the ratio decreased slightly, standing at 52.76 percent in the second quarter of 2024.