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Sujai Adithya
Business Development and Banking & Financial Services Expert
Asked a question 10 months ago

What is Net Interest Income?

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Sujai Adithya
Business Development and Banking & Financial Services Expert

Net interest income is the difference between the revenue generated by the bank and its expenses. Generally, a bank generates its income from interest-bearing assets7, whereas the expenses are mostly interest-bearing liabilities6. The assets of a bank would typically consist of all types of loans8, collaterals and mortgages6. The liabilities would be interest-bearing customer deposits6. The interest rate charged by the bank while giving loans is typically higher than the interest rate paid by the bank while taking deposits. This excess revenue generated from the interest earned on assets over the interest paid out on deposits is called the net interest income.