Northspread
Formula sheet/NISM Series XV: Research Analyst/Industry Analysis
[ INDUSTRY ANALYSIS ]

Banking Key Metrics: NIM and CASA Ratio

Net Interest Margin(NIM)=(Interest Income−Interest Expense)/Average Total Earning Assets\text{Net Interest Margin} (NIM) = (\text{Interest Income} - \text{Interest Expense}) / \text{Average Total Earning Assets}
CASA Ratio=(Current Account Deposits+Savings Account Deposits)/Total Deposits×100\text{CASA Ratio} = (\text{Current Account Deposits} + \text{Savings Account Deposits}) / \text{Total Deposits} \times 100
Variables

High CASA ratio reduces cost of funds for banks, improving net interest spread and profitability.

Worked examples
Top-Down Market Sizing for Diagnostic Healthcare

In a country of 140 Crore people, 8% of the adult population (80 Crore adults) is estimated to require an annual cardiac diagnostic checkup. Currently, 25% of eligible patients undergo testing. If the average realization per test is Rs 1,500, calculate the current market size and total addressable potential market size.

Banking Net Interest Margin (NIM) and CASA Ratio

Pragati Commercial Bank reports Interest Income of Rs 14,200 Cr, Interest Expenses of Rs 8,600 Cr, and Average Earning Assets of Rs 1,60,000 Cr. Total Deposits stand at Rs 1,80,000 Cr, consisting of Current Accounts Rs 28,000 Cr and Savings Accounts Rs 52,000 Cr. Calculate NIM and CASA ratio.