Strong asset growth has supported net interest income as margins remain weak.
Chart 26 has two bar chart elements, “Asset Growth” and “Net Interest Income Growth,” that pertain to the left Y axis, which shows a range between 15 and negative 10. A third chart element, “Net Interest Margin Ratio,” is a line that pertains to the right Y axis that shows a range between 4.0 and 3.0 percent. The X axis shows the time period between first quarter 2000 and third quarter 2005.
Asset growth in first quarter 2000 was about 8 percent and varied between approximately 5 and 10 percent between second quarter 2000 and second quarter 2001. It then dipped to about 3 ½ percent in first quarter 2002. From second quarter 2002 to third quarter 2005, asset growth ranged between approximately 6 and the peak of 12 percent, which occurred in second quarter 2003. Asset growth was about 7 percent in third quarter 2005, the last point in time shown on the chart.
Net interest income growth in first quarter 2000 was about 6 percent. It ranged between approximately 4 and 7 percent between second quarter 2000 and third quarter 2001, then rose to about 12 percent in fourth quarter 2001. It peaked at about 13 percent in first quarter 2002. Net interest income growth stayed near 10 percent until third quarter 2002, then fell below 5 percent and reached its lowest point of about 1 percent in third quarter 2003. From fourth quarter 2003 to third quarter 2005, net interest income growth ranged between approximately 3 and 9 percent (which occurred in third quarter 2004). It was about 5 percent in third quarter 2005.
The net interest margin ratio was slightly over 3.4 percent in first quarter 2000, then dipped to about 3.3 percent in first quarter 2001 and rose to just below 3.6 percent in first quarter 2002. It steadily declined to just above 3.2 percent in third quarter 2003, rose to about 3.3 percent in the next quarter, then trended downward to about 3.1 percent in second quarter 2005. The net interest margin ratio rose slightly to just above 3.1 percent in third quarter 2005.
Note: Growth calculated from the year-ago quarter.
Source: Integrated Banking Information System (Office of the Controller of the Currency).