The objectives of this research are to analyze quality of earnings and operatingefficiency of listed companies in the bank sector, to study the relation between quality ofearnings and operating efficiency, and to compare the quality of earnings and operatingefficiency between small , medium , and large banks. The data is collected from annualfinancial statements of ten banks between 2001-2005. They are divided into 3 bankgroups in accordance with total assets : large, medium and small banks groups.Statistical analysis methods are based on percentage, mean , and trend analysis. Therehypothesis are tested in this study by carrying out correlation Pearson coefficients(Scheffe) and One-Way ANOVA .The results indicate that from 2001 to 2005, 50 percent of the banks have qualityof earnings more than the average of the sector’s, 50 percent of the banks have ratio ofcash flow from operations per average total assets more than the average of thesector’s and 50 percent of the banks have ratio of cash flow to revenue more than theaverage of the sector’s. In addition, quality of earnings is significantly related withoperating efficiency. Quality of earnings is not different in accordance with sizes of bankand ratio of cash flow from operations per average total assets is not different, too.Ratio of cash flow to revenue is different in accordance with sizes of the bank.