Join Mailing List

For latest news and information about Treasury and Financial Markets, enter your details below:

Net interest income and low rates

Print Preview Send to a Friend Share

Published: 25th March 2017 by William Webster

You may have noticed that bank earnings are sensitive to interest rates. As rates fall the net interest income (NII) they earn falls too. Why is this?

Register for free or login to view the full publication

Related Documents

Free to ViewNet Interest Income 100% relevant

6th May 2020

For many banks and building societies Net Interest Income (NII) is a substantial part of “earnings”. Earnings allow us to add to capital, pay dividends and grow the business. Given its importance should NII be targeted by the Board?

Registration Requiredelearning > Forward interest rates 61% relevant

Learn about the following: What forward interest rates are and how they are calculated . How forward rate agreements (FRAs) work. The terminology associated with FRAs. How FRAs settle. How FRAs are used for trading and hedging.

Registration RequiredMarket Guides > Forward rate agreements 34% relevant

15th September 2009

Forward rate agreements (FRAs) are contracts for difference. They are traded in the over-the-counter (bilateral or non-exchange) market. They allow the two parties involved to hedge or speculate on interest rates in the future. Perhaps the easiest way to understand a FRA is to break it down into a loan and deposit. Let's try.

Free to ViewLegacy Assets 27% relevant

16th February 2020

The balance sheets of building societies often contain legacy assets. That’s business that you wish you hadn’t got. It can be on either side of the accounts and typically it’s base rate, Libor or lifetime linked. The customer may also have flexibility concerning drawdown and repayment, and this makes things worse. The net effect is to cut income whilst taking up management time – and it just keeps giving. Is there anything that top investors do that could help you?

Free to ViewWrite Mortgages, Wrong Price? 27% relevant

11th September 2020

Selling mortgages with interest rates of between 1% and 4% may seem like an opportunity too good to miss, particularly now Bank rate is 0.10%, but is this too good to be true? Let’s see.

Registration RequiredBonds Explained 18% relevant