What does net interest margin mean?
A bank earns interest on loans and investments. It pays interest to depositors and lenders. The gap between the two is net interest income, or NII.
Net interest margin, or NIM, shows that gap as a share of the assets that earn interest. It is the bank version of a profit margin, measured before staff costs, bad-loan provisions and tax.
Why do banks not use EBITDA?
For a factory, interest is a financing cost. For a bank, interest paid is the cost of its raw material, which is money.
So bank pages on Cityfort skip the operating margin and show NII and NIM instead.
Why can two banks' NIMs not always be compared?
Banks divide by different bases. Some use average interest-earning assets, some use average total assets, and some quote a "core" NIM without one-off items.
Where a bank's NIM is on average total assets or a "core" basis, the note beside its example says so.
What moves NIM?
Loan rates, deposit costs and the loan mix. Unsecured loans, such as credit cards, usually carry higher rates than home loans.
The deposit mix matters too, which is why NIM is often read with the CASA ratio.
Where do you see it on Cityfort?
Each bank's stock page shows NII and NIM in "The numbers", by year and by quarter.