Add SunTrust Banks (STI) in Atlanta to the list of banks that are taking yet another look at cutting costs.

The $173 billion-asset company is intent on reducing its salary and benefits costs this year as it looks to raise its efficiency ratio, Aleem Gillani, SunTrust's chief financial officer, said during a conference call Friday to discuss quarterly results.

"I do expect overall [compensation] to be going down," Gillani said in response to an analyst's question. "If you look at our total cost base, half of it comes from [compensation]. So that is an area on which we are intensely focused."

SunTrust had already been working to boost revenue and cut costs. Its efficiency ratio stood at 65.9% at Dec. 31, compared to 81.5% a year earlier.  Overall, net income more than quadrupled in the fourth quarter compared to a year earlier, to $350 million.

Still, analysts have questioned SunTrust about high compensation costs that have lingered despite a program to trim expenses by $300 million annually.

SunTrust has been swinging an ax, cutting 2,400 jobs last year, with nearly half of those coming in the fourth quarter. It closed 43 branches last year, including 17 in the fourth quarter. SunTrust wants to more directly tie employee compensation to performance across all divisions, and it is reducing its reliance on temporary staff.

"We are committed to operating more efficiently while expanding our penetration of existing relationships," William Rogers, SunTrust's chairman and chief executive, said during Friday's call. "Clients are increasingly utilizing self-service channels," giving SunTrust "the opportunity to make some changes to both our staffing model and retail branch network without compromising service levels."

Noninterest expenses fell 9% in the fourth quarter from a year earlier, to $1.5 billion. But employee compensation and benefits rose 18% from a year earlier, to $738 million.

"We're working on improving [our efficiency ratio] from several line items," Gillani said. Compensation "is obviously one."

Other banks are emphasizing expense control as the industry struggles to boost revenue. U.S. Bancorp (USB) in Minneapolis said Wednesday that it plans to reduce its industry leading efficiency ratio this year.

About 80% of earnings growth for banks this year will be tied to expense cuts and capital deployment, says Marty Mosby, an analyst at Guggenheim Securities.

SunTrust plans to save money elsewhere. It has been spending $10 million to $15 million quarterly on consultants to work on the industry's recent $8.5 billion foreclosure settlement with the Office of the Comptroller of the Currency. Those costs will go away starting later this quarter, Gillani says.

SunTrust also said its contribution to the OCC settlement was $63 million. It recognized $31 million of that amount in the third quarter. SunTrust also said it will pay $100 million in relief to borrowers as part of the settlement.

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