Banks
NIM — Net Interest Margin
Net interest income as a percentage of average interest-earning assets.
Definition
Net interest margin is the spread a bank earns between the interest it collects on loans and the interest it pays on deposits and other funding, expressed as a percentage of its interest-earning assets.
Formula
(Net Interest Income ÷ Average Earning Assets) × 100
Why it matters
NIM is the single most important profitability metric for a bank — it captures the core 'borrow short, lend long' economics. Rising NIM usually accompanies rising interest rates; falling NIM signals competitive pressure on loan pricing or deposit costs.
How Standard Equity uses it
Substituted for gross margin in bank reports — it's the analytically equivalent metric for the bank business model. Analyst estimates are the banks' own reported margin. The financial statements do not give earning assets, so earlier years use the reported margin where we have it and are otherwise estimated: net interest income over the share of average total assets that the reported years imply. Those cells carry a ○ with the reason. A bank with no reported margin to anchor on shows net interest income over total assets in every cell, marked the same way. Peer ranks compare net interest income over total assets for every bank, so they do not depend on whether the reported margin is available.
The metric
| Category | Banks |
|---|---|
| Unit | % |
| Applies to | Banks only |