atio loans to customers and short term funding (LOFUND) is used to measure the relationship between liquidity management and performance. This ratio shows the relationship paratively illiquid assets (i.e. loans) paratively stable funding sources (i.e. deposits and other short term funding). Therefore, the lower the value of this ratio, the more liquid the bank is. Since liquid assets are associated with lower rates of return a positive relationship is expected between this variable and performance.РThe cost to e ratio (COST) is used to measure the impact of efficiency in expenses management on banks performance. This ratio shows the costs of running the bank, the major element of which is staff salaries and benefits, and is expected to have a negative relationship with bank's performance.
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