The bank showed improvements in various performance gauges as revenue in the quarter rose 14 percent to $22.3 billion, excluding accounting charges. Adjusted net interest income increased 4 percent, according to the bank, and non-interest income jumped 28 percent as costs eased for refunds to investors on defective mortgages.
The net interest margin, the difference between what a bank pays for funds and what it earns on loans and investments, improved to 2.56 percent from the 2.44 percent reported in the third quarter and 2.35 percent a year earlier.
My opinion: Increases in net interest margin are a good indication of both better lending decisions and stronger economic performance. This seems like a promising trend for the coming year as I am inclined to say that businesses appear willing to pay a higher interest rate for loans. The latest jobs numbers would say that hiring has yet to increase as a result, but I would imagine that will change as the economy continues with strong numbers. Always keep in mind that slow growth is still growth and caution isn’t necessarily bad.