I’m watching provisions more closely than NIM.
Higher rates can support net interest income, but that benefit is fairly visible and can be partly offset by higher deposit costs. Provisions tell us something more important: whether banks themselves are seeing deterioration beneath the surface.
If NIM stays healthy while provisions remain contained, that is a strong combination for banks. But if provisions jump sharply, especially across both consumer and commercial books, I would treat that as an early warning that higher rates are finally feeding through to credit stress.
So for me: NIM drives earnings, but provisions drive the risk outlook. In this environment, the second matters more.
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