Net Interest Margin Calculated by WOWA Data Labs (Q2 2023 - Q2 2025)

🍁 Net Interest Margin Calculated by WOWA Data Labs

NIM measures a bank’s net interest income relative to its average interest-earning assets. As of Q2 2025, the weighted average NIM of Big 5 Canadian banks stands at 1.60%.

Note: Quarterly Net Interest Income is annualized by multiplying it by four, and average earning assets are used in the calculation.

🔹Key Insights:

• 1️⃣ NIM across all interest-bearing assets (including trading capital) ranged from 1.39% (Scotiabank, Q2 2023) to 1.75% (TD, Q4 2023).
• 2️⃣ Pre-pandemic weighted avg. NIM was ~1.8% (2015–2019) but declined to ~1.55% post-COVID, reflecting intensified competition for deposit and loan rates. It has risen above 1.6% in the last 3 quarters.
• 3️⃣ U.S. giants like JPMorgan, Bank of America & Citi reported higher NIMs (1.99% to 2.58%) due to riskier loan mixes (e.g., more business loans), though with higher default risk.

🔹NIM - Q2 2025:

• TD: 1.72%
• RBC: 1.60%
• BMO: 1.56%
• Scotiabank: 1.56%
• CIBC: 1.50%

🔹NIM ≠ Everything:

While NIM is a major factor in bank profitability, other key elements include:

• Operating costs: Leaner banks with lower non-interest expenses (e.g., salaries, operations) can increase profits even with a low NIM.
• Non-interest income: Fees, trading, and wealth management revenue boost earnings.
• Credit risks: Higher risks can bring higher rewards (higher NIM), but also may increase defaults, PCLs and ACLs.

Write-offs & PCL as % of Gross Loans + Acceptance

• Scotiabank: Write-offs (0.12%) & PCL (0.18%)
• TD: Write-offs (0.12%) & PCL (0.14%)
• BMO: Write-offs (0.08%) & PCL (0.15%)
• RBC: Write-offs (0.07%) & PCL (0.14%)
• CIBC: Write-offs (0.07%) & PCL (0.11%)