In banking, NFI stands for Non-Fund Income. It's a growing alternative to traditional Net Interest Income (NII).
Understanding Non-Fund Income (NFI)
Non-Fund Income (NFI) refers to the revenue a bank generates from sources other than interest earned on loans. This income stream is increasingly important in the dynamic banking ecosystem.
Why is NFI Important?
- Profitability: NFI offers higher profitability potential compared to traditional interest-based income.
- Resilience: It provides resilience to market fluctuations. Because it doesn't directly depend on interest rates, NFI can help banks maintain stable revenue during economic downturns or periods of low interest rates.
Examples of Non-Fund Income
While the provided context doesn't list explicit examples, NFI typically includes:
- Service Fees: Charges for services like account maintenance, wire transfers, and safety deposit boxes.
- Commissions: Income from selling insurance or investment products.
- Trading Income: Profits from trading securities.
- Investment Banking Fees: Fees earned from underwriting securities or providing advisory services.
- Card Fees: Interchange fees and other fees related to credit and debit card usage.
