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JPMorgan Chase & Co (NYSE:JPM)
Net Interest Margin (Bank Only) %
2.73% (As of Mar. 2017)

Net interest margin is 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), relative to the amount of their interest-earning assets. It is usually calculated as a percentage of what the financial institution earns on loans in a time period and other assets minus the interest paid on borrowed funds divided by the average amount of the assets on which it earned income in that time period (the average earning assets).

GuruFocus calculates net interest margin as net interest income divided by its average earning assets. JPMorgan Chase & Co's annualized net interest income for the quarter that ended in Mar. 2017 was $48,256 Mil. JPMorgan Chase & Co's average earning assets for the quarter that ended in Mar. 2017 was $1,764,818 Mil. Therefore, JPMorgan Chase & Co's annualized net interest margin for the quarter that ended in Mar. 2017 was 2.73%.


Definition

Net interest margin (NIM) is 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), relative to the amount of their interest-earning assets. It is usually calculated as a percentage of what the financial institution earns on loans in a time period and other assets minus the interest paid on borrowed funds divided by the average amount of the assets on which it earned income in that time period (the average earning assets).

JPMorgan Chase & Co's annualized Net Interest Margin for the fiscal year that ended in Dec. 2016 is calculated as

Net Interest Margin(A: Dec. 2016 )
=(Interest Income + Interest Expense)/Average Earning Assets
=Net Interest Income/( (Earning Assets (A: Dec. 2015 ) + Earning Assets (A: Dec. 2016 ))/2)
=46083/( (1670985 + 1772145)/2)
=46083/1764817.5
=2.68 %

where

Earning Assets(A: Dec. 2015 )
=Money Market Investments + Net Loan + Securities & Investments
=212575 + 823744 + 634666
=1670985

Earning Assets(A: Dec. 2016 )
=Money Market Investments + Net Loan + Securities & Investments
=229967 + 880989 + 661189
=1772145

JPMorgan Chase & Co's annualized Net Interest Margin for the quarter that ended in Mar. 2017 is calculated as

Net Interest Margin(Q: Mar. 2017 )
=(Interest Income + Interest Expense)/Average Earning Assets
=Net Interest Income/( (Earning Assets (Q: Dec. 2016 ) + Earning Assets (Q: Mar. 2017 ))/2)
=48256/( (1772145 + 1757490)/2)
=48256/1764817.5
=2.73 %

where

Earning Assets(Q: Dec. 2016 )
=Money Market Investments + Net Loan + Securities & Investments
=229967 + 880989 + 661189
=1772145

Earning Assets(Q: Mar. 2017 )
=Money Market Investments + Net Loan + Securities & Investments
=190566 + 882561 + 684363
=1757490

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Note: Interest Expense is the negative value.

In the calculation of annual net interest margin, the net interest income of the last fiscal year and the average earning assets over the fiscal year are used. In calculating the quarterly data, the net interest income data used here is four times the quarterly (Mar. 2017) net interest income data. Net Interest Margin is displayed in the 15-year financial page.


Explanation

The negative value of net interest margin mean the firm pays more interest for its debt than the interest revenue generated from its investment.


Related Terms

Interest Income, Interest Expense, Net Interest Income, Money Market Investments, Net Loan, Securities & Investments, gross margin


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

JPMorgan Chase & Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Net Interest Margin 2.122.603.193.132.782.522.462.562.582.68

JPMorgan Chase & Co Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Net Interest Margin 2.582.512.522.592.682.692.622.652.672.73
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