FT Guide to Banking

9

Bank financial statements

Banks need to measure how well they perform in trying to obtain a good return for shareholders. They do this through the income (profit) statement for a period. They also need to examine the total asset and liability position at a point in time, as well as the mixture of those assets and liabilities. These are summarised in the balance sheet. This chapter describes the main components of bank’s income statements and balance sheets. It looks at the results of two banks, Lloyds and Barclays, and uses the published numbers to explain some key metrics used by the banks themselves to judge performance and stability.

Also, an important form of both borrowing and lending is through the very active sale and repurchase ...