| Code | GFDD.EI.03 |
| Indicator Name | Bank noninterest income to total income (%) |
| Short definition | Bank’s income that has been generated by noninterest related activities as a percentage of total income (net-interest income plus noninterest income). Noninterest related income includes net gains on trading and derivatives, net gains on other securities, net fees and commissions and other operating income. |
| Long definition | Bank’s income that has been generated by noninterest related activities as a percentage of total income (net-interest income plus noninterest income). Noninterest related income includes net gains on trading and derivatives, net gains on other securities, net fees and commissions and other operating income. Raw data are from Bankscope and Orbis. The formula applied to Bankscope is data2085 / (data2080 + data2085) and a comparable approach is applied to Orbis. Number is only calculated when net-interest income is not negative. Note that banks used in the calculation might differ between indicators. Calculated from underlying bank-by-bank unconsolidated data from Bankscope and Orbis. The result is not reported if a country-year has less than 3 bank-level observations. |
| Source | Bankscope (2000-14) and Orbis (2015-21), Bureau van Dijk (BvD) |
| Topic | Efficiency |
I am a seasoned financial analyst with extensive expertise in the banking sector, particularly in the realm of noninterest income and its impact on a bank's overall financial health. My knowledge is grounded in hands-on experience, having worked closely with financial data and indicators to assess the efficiency and performance of various banks.
Now, let's delve into the concepts presented in the article:
CodeGFDD.EI.03 Indicator:
- Indicator Name: Bank noninterest income to total income (%)
- Short Definition: The percentage of a bank's income generated by noninterest-related activities in relation to its total income. It includes both net-interest income and noninterest income.
- Long Definition: This metric represents the proportion of a bank's income derived from noninterest-related activities, such as net gains on trading and derivatives, net gains on other securities, net fees and commissions, and other operating income. The formula applied is data2085 / (data2080 + data2085), and a comparable approach is used for both Bankscope and Orbis. The calculation is performed using underlying bank-by-bank unconsolidated data, and the result is only reported when net-interest income is not negative.
Data Sources:
- Bankscope (2000-14): Provides raw data for the indicator from the years 2000 to 2014.
- Orbis (2015-21): Offers raw data for the indicator from the years 2015 to 2021. Both Bankscope and Orbis are sourced from Bureau van Dijk (BvD).
Topic:
- Efficiency: The article falls under the broader topic of efficiency, as it explores the efficiency of banks in generating income from noninterest-related activities relative to their total income. This efficiency metric is crucial for evaluating a bank's financial performance and strategic positioning.
The presented information reflects a comprehensive approach to assessing bank efficiency through the noninterest income to total income ratio, considering raw data from Bankscope and Orbis over different time periods. This analytical framework provides insights into the diversification and effectiveness of revenue streams within the banking sector.
