What is 'net interest margin' in SAP IS-B-PA - Profitability Analysis?

net interest margin - Overview

• Component: IS-B-PA

• Component Name: Profitability Analysis

• Description: The difference between the interest contribution and the opportunity contribution. The interest terms contribution is determined for customer transactions such as loans and account transactions within Single Transaction Costing.

net interest margin - Details

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  Key Concepts: 
  Net interest margin is a measure of profitability used in the IS-B-PA Profitability Analysis component of SAP. It is calculated by subtracting the cost of borrowing from the income generated from lending. This measure is used to assess the profitability of a financial institution's lending activities. 
  
  How to use it: 
  Net interest margin can be calculated in SAP by entering the cost of borrowing and income generated from lending into the IS-B-PA Profitability Analysis component. The system will then calculate the net interest margin and display it on the screen. 
  
  Tips & Tricks: 
  When calculating net interest margin, it is important to ensure that all costs associated with borrowing and income generated from lending are included in the calculation. This will ensure that an accurate measure of profitability is obtained. 
  
  Related Information: 
  Net interest margin can be used in conjunction with other measures of profitability, such as return on assets and return on equity, to assess the overall performance of a financial institution.