Noninterest Income
Revenue from fees, trading, and services rather than lending.
Definition
Noninterest income encompasses all bank revenue that does not come from net interest income. This includes service charges, wealth management fees, trading revenue, investment banking fees, mortgage origination income, and card interchange fees.
Why It Matters
Banks with higher noninterest income ratios are more diversified and less sensitive to interest rate cycles. Investment banks like Goldman Sachs derive the majority of revenue from noninterest sources.