The difference between interest receivable on financial assets classified as loans and receivables or available-for-sale (AFS) and interest payable on financial liabilities carried at amortized cost. Simply put, net interest income (NII) represents the “positive” difference between interest revenues and interest expenses.

An entity, as a lender, earns from credit products such as loans and mortgages, while deducting the interest it pays to holders of its debt securities and the loans obtained from other entities (also, deposits mobilized from the market).

NII is a profit measure that constitutes the interest amounts left after deduction of all interest expenses incurred by an entity over a specific period of time.