Net Interest Margin refers to the difference between the interest earned by a bank or financial institution on its assets, such as loans and investments, minus the interest paid out on its liabilities, such as deposits and borrowings. It is calculated by subtracting the total of all expenses incurred from the total revenue generated by the bank's earning assets. The net interest margin provides insight into a bank’s profitability and efficiency in managing its balance sheet. A higher net interest margin indicates that the bank is generating more income from its assets than it is paying out on its liabilities, which can be an indicator of strong financial performance. Conversely, a lower net interest margin may suggest that the bank's expenses are too high or that it is not effectively managing its balance sheet to generate sufficient revenue.