Banks
Loan yld — Loan Yield
Net interest income as a percentage of average loans.
Definition
Loan yield is the net interest income a lender earns on its loan book, expressed as a percentage of its average loans. It is the lender's counterpart of a bank's net interest margin, measured on the loans because only part of a lender's assets are loans: a card issuer also holds cash, investments and charge-card receivables that earn no spread.
Formula
(Net Interest Income ÷ Average Loans) × 100
Why it matters
It shows what the loan book earns after funding costs, so lenders with very different balance sheets can be compared on the same footing. Net interest income over total assets would understate a lender that holds half its assets outside loans (American Express: 5.8% on total assets against 11.1% on loans).
How Standard Equity uses it
Shown in place of NIM for non-bank lenders (SA's Financial Services template: card issuers, consumer and student lenders, mortgage lenders), whose statements give no reported margin. The history uses average loans (the oldest year its year-end loans); the latest twelve months and the forward year hold the latest year's loan share steady. Every cell carries a ○, because it is our measure, not a figure the company reports. A lender whose loans are under 40% of its assets (a securities or servicing book) keeps net interest income over total assets, named NIM and marked the same way. Peer ranks compare net interest income over total assets for every bank and lender.
The metric
| Category | Banks |
|---|---|
| Unit | % |
| Applies to | Banks only |