Finance and banking acronyms explained: ARR, NIM, NRR and more

Finance and banking teams use dozens of acronyms, and some mean different things in different rooms. This page spells out the common ones, gives a one-line definition for each, and links to a full guide where one exists. Watch for FTE in particular: in a margin report it means fully tax-equivalent, and in a headcount report it means full-time equivalent.

Shorthand saves time until two teams expand it differently.

Revenue and growth

• ARR, annual recurring revenue. The annualized value of active recurring contracts.
• CARR, contracted annual recurring revenue. ARR including contracts that are signed but haven't started.
• MRR, monthly recurring revenue. Recurring revenue for one month. ARR is often MRR times 12.
• NRR, net revenue retention. Recurring revenue kept and grown from existing customers. How to calculate NRR
• GRR, gross revenue retention. Retention without expansion, capped at 100%.
• EBITDA. Earnings before interest, taxes, depreciation and amortization.

Banking performance

• NIM, net interest margin. Net interest income divided by average earning assets. How to calculate NIM
• NII, net interest income. Interest earned minus interest paid.
• FTE, fully tax-equivalent. Tax-exempt income grossed up so it compares with taxable income.
• ROA and ROE, return on assets and return on equity. Net income divided by average assets or average equity.
• Efficiency ratio. Noninterest expense divided by revenue. How to calculate the efficiency ratio
• Deposit beta. The share of a market rate change passed through to deposit costs. How to calculate deposit beta

Capital, credit and liquidity

• CET1, common equity tier 1. The highest-quality regulatory capital, measured against risk-weighted assets.
• CECL, current expected credit loss. The accounting standard for estimating lifetime credit losses.
• LCR, liquidity coverage ratio. High-quality liquid assets against 30 days of projected net outflows, required only of larger banks.

Regulation and reporting

• ALCO, asset-liability committee. Oversees interest rate risk, liquidity and the balance sheet.
• BCBS 239. Basel Committee principles for risk data aggregation and reporting.
• UBPR, Uniform Bank Performance Report. The FFIEC's analytical report on bank performance, which defines core deposits. How to calculate core deposits
• FFIEC, Federal Financial Institutions Examination Council. The interagency body behind the call report.

Finance teams and systems

• FP&A, financial planning and analysis. The team that budgets, forecasts and explains results.
• GL, general ledger. The accounting system of record.
• ERP, enterprise resource planning. The system that runs accounting and operations.
• CRM, customer relationship management. Where sales records accounts and deals.
• HRIS, human resources information system. Where employee and headcount data lives.
• FTE, full-time equivalent. A headcount measure. Not the same FTE as above.

Data and AI

• ETL and ELT. Extract, transform and load, or load first and transform later.
• FIBO, Financial Industry Business Ontology. The industry standard ontology for financial concepts. What is a data ontology?

How Preql helps

Preql keeps each approved definition with an owner, version history and lineage back to source, so ARR, NIM or FTE means the same thing across your reports.

FAQ

Why do acronyms cause reporting errors?

Because two teams can expand the same shorthand differently, or calculate the same metric with different rules.

Should our KPI dictionary list acronyms?

Yes. Give each one a single expansion. Finance KPI dictionary template

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