While average deposit rates only decreased by around 0.2 percentage point between June 2014 and May 2016, loan rates decreased by around 0.8 percentage point, effectively reducing the interest margin.
This is also shown on slide 10, using profit and loss data of a group of large euro area banks, which on average indeed have seen a reduction of their net interest margins – defined here as net interest income over total assets – since mid-2014. [Slide 10: Euro-area large banks: Net interest margin] But what about overall income?