net interest rate of return formula:

net interest rate of return = (interest income-interest expense) ÷ (average balance of interest-bearing assets),

net interest rate of return is the ratio of net interest income to the average balance of total interest-bearing assets, and the net interest rate of return is an indicator to measure the profitability of bank loan business. The higher the number, the higher the profitability of the bank.

in the formula, interest income includes interest income from loans and securities investments, interest expenses include interest expenses from deposits and borrowings, and profitable assets refer to assets after deducting cash assets and fixed assets from total assets. In fact, the net interest rate of return is to compare the growth rate of spread income with the growth rate of profitable assets. The increase of net interest rate of return shows that the growth rate of net interest income is faster than that of profitable assets. While increasing profitable assets, banks have better controlled interest costs and high operating efficiency.