All cases

The deposit repricing squeeze

Banking · Fictional case

The situation

A fictional bank has ₹2,000 crore average earning assets, ₹140 crore annual interest income and ₹60 crore annual interest expense. It expects average earning assets and interest income to remain flat while annual expense rises by ₹16 crore.

The decision

What happens to net interest margin on the stated assumptions?

Study read a bank’s net interest margin