What makes up your bank's balance sheet?
What makes up your Bank’s Balance sheet?
A bank’s balance sheet is a snapshot of its finances at a certain point in time, and represents activities like making loans to households, businesses and, taking deposits.
There are three main parts to a balance sheet: Assets, Liabilities and Equity. The ‘Balance’ in balance sheet refers to the fact that Assets must always equal the sum of liabilities and Equity.
For most banks, loans to customers are the most common type of asset on their balance sheet. And deposits from households are usually the most common liability.
Finally, banks have equity. Equity is the difference between a bank’s assets and its liabilities and represents the owner’s stake in the business. The most common forms of equity are ordinary shares, reserves and profit.
You can learn more about your bank’s balance sheet on the Bank Financial Strength Dashboard.