MANAGEMENT

Detailed explanation-1: -Definition: Net interest income (NII) is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors.

Detailed explanation-2: -Net interest income is defined as the difference between interest revenues and interest expenses. Interest revenues are payments that the bank receives from their interest-bearing assets, and interest expenses are the cost of servicing interest payments to customers on their deposits.

Detailed explanation-3: -A bank earns a spread on the funds it lends out from those it takes in as a deposit; the net interest margin (NIM) represents this spread, which is simply the difference between what it earns on loans versus what it pays out as interest on deposits.

Detailed explanation-4: -Gross interest is the headline interest rate earned on a fixed-income investment or paid on a loan before fees or taxes are accounted for. The gross interest rate is what is more often quoted for a loan or investment. Net interest deducts the impact of taxes, fees, and other costs from the gross interest.

Detailed explanation-5: -Net interest margin is similar in concept to net interest spread, but the net interest spread is the nominal average difference between the borrowing and the lending rates, without compensating for the fact that the earning assets and the borrowed funds may be different instruments and differ in volume.