Bankovní metriky
Bank Metrics · NIM · NPL · Capital Adequacy · Asset Quality
Specific indicators for evaluating banks — loan portfolio profitability, asset quality, and capital adequacy.
What it is
Banks have a different business model than industrial companies — they earn on the interest spread (the difference between loan yields and deposit costs). Therefore they are evaluated using different metrics.
NIM (Net Interest Margin): NIM = (Interest Income − Interest Expense) / Average Interest-Earning Assets
The key profitability indicator for a bank. Typical values: 2–4% (retail banks), below 2% (large European banks with low rates). When interest rates rise, NIM expands (banks reprice loans faster than deposits).
NPL (Non-Performing Loans): Loans where the borrower has stopped repaying for more than 90 days. NPL ratio = NPL / Total Loans.
- →Below 2% = healthy portfolio
- →Above 5% = warning, troubled bank
- →Above 10% = crisis situation
Capital Adequacy: The ratio of regulatory capital to risk-weighted assets. Basel III/IV regulation requires minimum ratios:
- →CET1 (Core Equity Tier 1): min. 4.5% (in practice banks hold 12–15%)
- →Tier 1 capital: includes CET1 + Additional Tier 1
Asset Quality: An overall assessment of the riskiness of the loan portfolio — NPL, loan loss reserves, coverage ratio (how well problem loans are covered by provisions).
Loan-to-Deposit Ratio: Loan volume / Deposit volume. Above 100% = bank is funding loans from sources other than deposits → higher liquidity risk.
Why track it
Investing in bank stocks requires a different analytical approach:
- →NIM rises with interest rates → banks benefit from rising rates
- →NPL are a leading indicator of an economic recession
- →Capital adequacy determines the bank's ability to withstand a crisis without government assistance
Monitor the NIM trend — NIM compression at zero rates squeezes bank profitability.
Real-world example
Typical large EU bank (2025):
- →NIM: 1.8–2.5% (low vs. USA 3–4%)
- →NPL ratio: 2–4%
- →CET1: 13–16%
- →P/B: 0.6–1.2× (banks typically trade at or below book value)
The ECB rate hike cycle 2022–2024 significantly improved NIM for European banks → sector rally.
Watch out for
Banks are sensitive to the credit cycle — in a recession NPLs rise rapidly and provisions must be replenished from earnings. Always monitor the coverage ratio (provisions / NPL): below 60% is a problem.