The full form of NII is Net Interest Income

Net interest income is a financial performance measure that reflects the difference between the revenue generated from a bank’s interest-bearing assets and the expenses associated with paying on its interest-bearing liabilities. A typical bank’s assets consist of all forms of personal and commercial loans, mortgages, and securities. The liabilities are interest-bearing customer deposits. The excess revenue that is generated from the interest earned on assets over the interest paid out on deposits is the net interest income.

• Net interest income reflects the difference between the revenue generated from a bank’s interest-bearing assets and the expenses associated with paying its interest-bearing liabilities.
• The type of assets earning interest for the bank can range from mortgages to auto, personal, and commercial real estate loans.
• The amount of net interest income a bank generates will depend on many factors including the quality of the loan portfolio, the collective interest rates each type of loan carries, as well as whether the loans carry a fixed or variable rate.
• Banks calculate their net interest income by subtracting the interest they must pay out to their clients from the interest income they generate.
• You can find a bank’s net interest income in its quarterly and annual reports.

Net interest income (NII) is the difference between revenues generated by interest-bearing assets and the cost of servicing (interest-burdened) liabilities. For banks, the assets typically include commercial and personal loans, mortgages, construction loans and investment securities. The liabilities consist primarily of customers’ deposits. NII is the difference between (a) interest payments the bank receives on loans outstanding and (b) interest payments the bank makes to customers on their deposits.

NII = (interest payments on assets) − (interest payments on liabilities)