Reading a bank's balance sheet
Deposits, loans, equity and assets — what each line tells you about a bank's health, in plain language.
A bank's balance sheet looks intimidating, but four lines carry most of the story. Here is what each one tells you — and what to look for over time.
The four lines that matter
Deposits
What customers have entrusted to the bank. Deposits are a liability — the bank owes this money back — but they are also its raw material: deposits are what funds lending. Steady deposit growth means customers keep choosing the bank.
Loans
What the bank has lent out. Loans are the main earning asset of a commercial bank. Compare loans to deposits: a very high loan-to-deposit ratio means the bank is lending aggressively and keeps less liquidity in reserve; a very low one may mean missed income.
Total assets
Everything the bank controls — loans, cash, central-bank balances, investments, buildings. Size alone says little about health, but the growth rate of assets against the growth rate of capital is one of the first things a supervisor watches.
Equity
The owners' stake — the money shareholders have put in plus retained profits. Equity is the cushion that absorbs losses before depositors are touched. It feeds directly into the Capital Adequacy Ratio (see the CAR explainer).
Putting it together
- Profit growing faster than equity over years can quietly erode the capital ratio.
- Loans growing much faster than deposits can signal liquidity strain — see the liquidity ratio explainer.
- One year tells you little — the five-year trend on each profile page is where the story is.
All of these lines appear, with their five-year trends and source citations, in Detailed mode on every bank's profile.