Answer: Difference between interest earned and interest paid
Notes: Net Interest Income (NII) is defined as the difference between the interest earned on assets (like loans and investments) and the interest paid on liabilities (like deposits). It is a key measure of a bank's profitability, reflecting how well it manages its interest rate spread. NII is crucial for banks as it accounts for a important portion of their revenue. In 2021, U.S. banks reported an average NII of around $100 billion, which indicates its importance in the financial sector.
