The difference between interest earned on loans and interest paid on deposits.
Net Interest Margin - NIM
This is in a way the spread earned on the money the bank has. This is given by (Interest Earned – Interest Spent )/ (Average Interest Generating Assets) CAR | CASA
Capital Adequacy Ratio - CAR
This is a measure of the Bank’s minimum required Equity Capital as per regulations. It is calculated by dividing a bank's capital by its risk-weighted assets.
Current and Savings Accounts - CASA
A low-cost source of funds for banks. Typically Current Accounts pay 0% interest, while Savings accounts pay low interest rates. Thus the bank is able to raise money at lower rates through CASA. GNPA | NNPA
Gross Non Performing Assets - GNPA
The amount of loans classified as non-performing. Here the borrower has failed to repay the loan/interest on time.
Net Non Performing Assets - NNPA
Banks are supposed to put aside provisions for Non- Performing Loans. Net NPA can broadly be seen as Gross NPA minus these provisions. CRR | SLR
Cash Reserve Ratio - CRR
The amount a bank has to set aside as Cash with the Central Bank – in order to ensure liquidity for depositors withdrawing money.
Statutory Liquidity Ratio - SLR
The amount of money banks have to keep in very liquid instruments (Treasuries or Gold) such that it can be liquidated easily in emergency. PPOP | LCR
Pre Provisioning Operating Profit - PPOP
A measure of a bank's operating profitability before accounting for loan loss provisions. It is the income generated by a bank from its core business activities, such as net interest income, fee income, and trading income, minus its operating expenses.
Liquidity Coverage Ratio - LCR
A regulatory requirement that measures a bank's ability to meet its liquidity needs during a 30-day stress scenario. It is calculated by dividing a bank's high-quality liquid assets (HQLA) by its net cash outflows over the next 30 days. ANALYST PROGRAM
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