What is Asset Quality?

A quick video explaining what a bank's asset quality is and how it is measured.

What is Asset Quality?

When banks make loans to households and businesses like farms and a whole heap of others – these are considered assets for the banks. A common way to measure the quality of these assets is by the amount of these loans that are non performing.

Non-performing loans are loans that are at risk of not being fully repaid, or where interest on the loan may not be fully paid by the borrower.

In this bank, all of it’s borrowers are repaying their loans on schedule. So the bank’s non-performing loans are very low.

Here is a bank where fewer of it’s borrowers are keeping up with their repayments, so the bank has higher levels of Non performing loans.

You can learn more about your bank’s Asset quality on the Bank Financial Strength Dashboard.

Go to the Bank Financial Strength Dashboard