This excerpt taken from the C 10-Q filed Aug 1, 2008.
Average RatesInterest Revenue, Interest Expense, and Net Interest Margin
A significant portion of the Company's business activities are based upon gathering deposits and borrowing money and then lending or investing those funds, including market-making activities in tradable securities. Net interest margin (NIM) is calculated by dividing annualized gross interest revenue less gross interest expense by average interest earning assets.
During the second quarter of 2008, the significantly lower cost of funding more than offset the lower asset yields, resulting in higher NIM. On the assets side, the average yield was negatively impacted by the decline in the rates for Fed Funds Sold as well as lower yields of the Consumer loan credit card receivables portfolio.