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Net Interest Income

 

Net interest income is an indicator that measures lending business performance of a financial institution. Basically, it is equal to interest income from loans and other assets less interest expenses for deposits and other financial liabilities. 

 

Net interest income formula


Net interest income = Interest income – Interest expense


 

Every lending institution tries to get deposit at the lowest rate and to provide loans at highest rate (of course, safety is another criterion), and those institutions which succeed at it earns higher ‘net interest income’. Net interest income is formed by lending and borrowing interest rates, and many factors have effect to those. Read more about these factors in ‘net interest margin

 

 






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