How much does the bank earn on the money it lends, after paying its depositors?
Net Interest Margin (NIM)
Bank numbers
NIM is the bank's interest earnings minus interest paid, for every ₹100 it has lent or invested.
In everyday life
You borrow from your sister at 4% and lend to a friend at 10%. You keep the 6% gap. For a bank, that gap is its NIM.
How it's worked out
Example: Lotus Bank, a made-up company that takes deposits and gives loans.
In words: ₹3 earned for every ₹100 lent or invested, after paying depositors.
Try it yourself
Move the sliders and watch the answer, the picture and the verdict change together.
₹3 earned for every ₹100 lent or invested, after paying depositors.
- Net interest income
- The rest
Each dot is 1 of every 100 in “loans and investments”.
Rough guide
- Thin
- Healthy
- Strong
What's a good number?
- Thin
Up to 2.5%
- Healthy
2.5% to 3.5%
- Strong
Above 3.5%
Banks that lend to small borrowers usually earn a wider gap, but also take more risk. Read NIM with bad loans.
Key number in the sector guides for Banks.
How to read it
Good signs
- Steady NIM even when interest rates change.
- Wide NIM thanks to cheap deposits (a high CASA ratio).
Watch out for
- A very high NIM from risky lending: check gross NPA.
Read it with
For learning only. Example companies are made up, and the rough guides are rules of thumb, not targets. Nothing here is advice to buy or sell any stock.