Net Interest Margin — The New Normal (Bank Stocks Not Reacting Well To Balance Sheet Reduction)

Net interest margin,  a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), has shown an interest pattern from before to after the financial crisis of 2008.

nimfed

Prior to the financial crisis of 2008, NIM was falling for the most part. But after 2008, NIM rose rapidly in 2009 and 2010. From 2010 to 2015, NIM steadily fell. But once 2015 hit. NIM has been steadily rising with The Fed Funds Target Rate.

But for US bank stocks, they have not fared well with The Fed’s balance sheet unwind.

spdrbank

 

 

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