1492 terms

Glossary

Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.

Showing 2 terms

NIM

Fundamental analysis

Also called: Net interest margin

Net interest margin — net interest income divided by average interest-earning assets.

In plain terms

Never read it without GNPA: a rising margin earned by lending to riskier borrowers is not skill. It is also not the same number as the lending spread, because the margin counts the assets funded by the lender’s own capital, which cost nothing.

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Lending spread

Fundamental analysis

Yield on assets minus cost of funds — two rates, subtracted.

In plain terms

The measure a capital raise cannot flatter. Net interest margin rises when more of the book is funded by shareholders’ money; the spread, being a difference of two rates, cannot move for that reason.

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