Metrics & KPIsNet loan charge-offs
Definition
Net loan charge-offs is measured by dividing the amount of net charge-offs by the average loan balance. Charge-offs are loans that will probably not be repaid and have been expensed as a loss to the overall profitability of the bank. This KPI is important because is serves as an indicator of asset quality and directly impact the overall profitability of the bank.
Tags
loan, expense, profit, asset, quality