Net interest margin = net interest income/average interest-bearing asset size
= (interest income-interest expense)/average interest-bearing assets scale
= (average interest-bearing assets × interest rate-average interest-bearing liabilities × interest rate)/average interest-bearing assets.
= interest rate-(average interest-bearing liabilities/average interest-bearing assets) × interest rate
Net interest margin and net interest margin are two different concepts. The net interest margin represents the difference between the bank's capital cost and the income from capital utilization, which is equivalent to the concept of gross profit margin, while the net interest margin represents the result of capital utilization, which is equivalent to the concept of return on net assets.
Net interest margin is the spread between bank deposits and loans.
Net interest margin refers to the difference between interest income and interest expense divided by the average value of profitable assets.
Thus, the relationship between net interest margin and net interest margin is very close. In the quantitative relationship, the two can be large or small, because the average interest-bearing assets and the average interest-bearing liabilities are large or small.