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Sujai Adithya
Business Development and Banking & Financial Services Expert
Asked a question last year

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 assets8, whereas the expenses are mostly interest-bearing liabilities8. The assets of a bank would typically consist of all types of loans9, collaterals and mortgages7. The liabilities would be interest-bearing customer deposits7. 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.