Net Interest Margin (NIM)
Percentage of assets generating interest income after interest expense
FORMULA
NIM = (Interest Income - Interest Expense) / Average Earning Assets
Alternate Calculations
Simplified
(Net Interest Income / Average Assets) × 100What is Net Interest Margin?
Net Interest Margin (NIM) measures the difference between interest income from loans and interest expense on deposits, expressed as a percentage of average earning assets. A key profitability metric for banks and financial institutions.
Higher NIM indicates better lending profitability. Affected by rate environment, credit quality, and lending mix.
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Sample Data
| month | income | expense | assets | nim |
|---|---|---|---|---|
| Jan | 45,000 | 12,000 | 2,200,000 | 1.5 |
| Feb | 46,500 | 12,500 | 2,250,000 | 1.51 |
| Mar | 48,000 | 13,000 | 2,300,000 | 1.53 |
| Apr | 49,500 | 13,200 | 2,350,000 | 1.54 |
| May | 51,000 | 13,500 | 2,400,000 | 1.56 |
| Jun | 52,500 | 13,800 | 2,450,000 | 1.58 |
Required Data Columns
interest_incomeinterest_expenseavg_earning_assets