NIM Variance Explainer

Understand what's driving margin changes—fast

Net Interest Margin (NIM) is the core profitability metric for any lending institution—but explaining why it moved is complex.

Variance threshold: NIM moves more than 5 basis points (bps) from forecast
Weekly schedule: Friday afternoon to prepare for Monday ALCO meetings
Current NIM with comparison to prior period, budget, and trailing average
Asset yield breakdown by product
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NIM Variance Analysis

Q4 vs Q3 • Margin compression detected

-12 bps
Current NIM
2.34%
Prior Period
2.46%
Asset Yield Impact
-8 bps
Funding Cost Impact
-4 bps
Variance Drivers
Loan repricing lag-5 bps
Deposit mix shift-4 bps
Volume effect-3 bps
Key Insights
Repricing mismatchTD rate pressureReview pricing

Built for finance teams who demand NIM precision

Net Interest Margin (NIM) is the core profitability metric for any lending institution—but explaining why it moved is complex.

Treasury Managers

Settlement flow management

Finance Directors

Strategic oversight & escalation

FP&A Leads

CFOs

Portfolio-wide oversight

From alert to action in minutes

The objective of this agent is to reduce time to explain margin changes.

Step 1

The Trigger

You define when the agent should activate. When conditions are met, it starts working automatically.

  • Variance threshold: NIM moves more than 5 basis points (bps) from forecast
  • Weekly schedule: Friday afternoon to prepare for Monday ALCO meetings
  • Monthly close: First business day after month-end for earnings analysis
Step 2

360° View

The agent opens a tailored dashboard consolidating data from all your systems.

  • Current NIM with comparison to prior period, budget, and trailing average
  • Asset yield breakdown by product (commercial loans, mortgages, securities)
  • Funding cost breakdown by source (deposits, wholesale funding, borrowings)
Step 3

Automated Analysis

The agent follows a structured analysis flow, combining checks with exploratory reasoning.

  • Rate vs. volume separation: Calculates how much came from rate movements vs. volume effects.
  • Asset yield drill-down: Identifies which portfolios saw the largest rate movements.
  • Funding cost attribution: Analyzes changes by source—deposit pricing, wholesale spreads, borrowing rates.
Step 4

Actionable Output

After analysis, the agent creates a human-friendly report with everything your team needs.

  • Executive summary: NIM movement explanation with top drivers quantified in basis points
  • Variance decomposition table: Rate, volume, and mix effects with bps attribution
  • Business line impact: Margin contribution by segment
Step 5

Delivery

Reports are sent automatically via email or accessed directly in Veezoo.

Key benefits for finance teams

Concrete, measurable value for your team from day one

Fast Action

Faster margin explanations

Before: 1-2 days of spreadsheet work. Now: complete analysis in minutes, triggered automatically.

High Accuracy

Root cause visibility

Move beyond "NIM declined" to precise attribution: "funding costs rose 12 bps while asset yields lagged 5 bps."

Deep Analysis

Consistent methodology

Every analysis follows the same decomposition logic, ensuring comparability.

Up and runningin production in weeks

To deploy this Agent, you connect Veezoo to your existing Data Warehouse, typically containing data from:

Core Banking System: Loan and deposit balances, rates, repricing terms
Treasury Management System: Wholesale funding, borrowing rates, securities yields
General Ledger / ERP: Interest income, interest expense, average balances
ALM System: Repricing schedules, gap analysis data
Asset Yield
Funding Cost
Volume
Mix
NIM
Variance

Ready to explore NIM Variance Explainer?

Fully customizable to your workflows, data sources, and business requirements.

Try for freeBook a call

Typical initial implementation in weeks, not months.