Net interest income

The net interest income (short: NZE , also: net interest income , net interest income ) is the difference between the received and paid interest. This difference is an important indicator of how successfully a bank performs the function of financial intermediation . In this sense, the net interest margin is also calculated as net interest income as a percentage of average assets.

Calculation and components

The formula for calculating the net interest income is:

${\displaystyle {\text{NZE}}={\text{Gesamtzinsertrag}}-{\text{Gesamtzinsaufwand}}}$

where total interest income includes all income received from interest-bearing assets and total interest expense includes all expenses paid from interest-bearing liabilities over the entire term.

Total interest income

The total interest income, the main source of income of a bank. This position of the bank's balance sheet is derived from the sum of all interest received from financial operations, and interest rates on approved loans , purchased securities (z. B. bonds , money market securities ), deposits at other banks, repurchase agreements and the income from finance leases . Most of this income is usually the interest on granted loans, and the amount of other interest income depends on the asset structure.

Total interest expense

The total interest expense includes all interest paid on the financial operations of the bank or the interest on various types of deposits (e.g. perpetual funds, savings deposits ), loans taken out with other banks or with the central bank , securities issued, repurchase agreements and the interest paid from subordinated loans . The relative importance of these expenses to the banks differs based on their liability structure, but the interest on deposits still reaches the highest percentages.

See also

• interest
• Yield
• effort
• Bank accounting

Individual evidence

1. ^ John C. Hull, Options, Futures and Other Derivatives (Pearson Studium - Economic BWL), 2005, p. 129.
2. ↑ Goran Petrevski, Upravuvanje so bankite (vtoro izdanie), Skopje: Ekonomski facultet, 2011, pp. 40–41.
3. ↑ Goran Petrevski, Upravuvanje so bankite (vtoro izdanie), Skopje: Ekonomski fakultet, 2011, pp. 41–42.