Net Interest Margin (NIM)
Difference between interest earned on loans and interest paid on deposits.
Detailed Description
Net Interest Margin (NIM)
What does NIM stand for?
NIM stands for Net Interest Margin.
How is NIM calculated?
NIM is calculated using the formula: (Interest Income - Interest Expense) / Average Earning Assets x 100.
Why is NIM important for banks?
NIM is important as it indicates a bank's profitability and efficiency in managing interest-earning assets and liabilities.
What factors can affect NIM?
Factors affecting NIM include interest rates, loan-to-deposit ratio, credit quality, operational efficiency, and regulatory environment.
How does NIM relate to real estate financing?
In real estate financing, NIM reflects how well mortgage lenders and REITs generate income from real estate loans relative to funding costs.