In this workout, we need to calculate the net stable funding ratio for the below bank.

To calculate the net stable funding ratio, we need to compare the available stable funding to the required stable funding.

To calculate the available and required stable funding, we're going to have to apply these factors to the various line items.

So at the top, we've got the available stable funding factors that we're going to be applying to equity and liabilities, and below that, we've got the required stable funding factors that are going to be applied to the various asset balances.

We've then got the balance sheet of the bank, so total assets and total liabilities and equity. Let's start with calculating the available stable funding.

So starting with capital, we're going to go pick up the factor for equity capital and apply that to total equity from the balance sheet.

Next, we have deposits. So let's go pick up the factor for deposits.

And we need to apply that to total deposits, which we're going to find under liabilities.

Finally, we need to pick up all the other liabilities together with their factor.

So I'm just going to apply the factor to the sum of all the other liabilities.

And if we add this all together, we've got the available stable funding for 2024.

Let's copy this to the right.

And now we have available stable funding for both years.

Let's now do the same thing for the asset side.

We need to apply the relevant factor to the corresponding line item.

Let's start off with cash.

So that's a factor of 0%, and we need to apply that to the cash balance.

We need to do the same for investment securities.

So that's 5%.

And the same for loans held for sale. So this is a little monotonous.

We just need to be careful, though, if we're copying formulas down because it could be that things are maybe grouped a bit differently.

So let's rather do them one by one. So loans held for sale, let's go to apply that to the loan balance.

Then we've got corporate loans.

Next, we've got commercial and residential mortgages grouped together.

So we need to go pick up the factor for that and then multiply that by the sum of the two types of mortgages. So we've got the commercial real estate mortgages and directly underneath that, the residential mortgages.

We've then got all other loans.

So the relevant factor for these is 100%, and I then need to multiply that by the sum of the credit cards and other retail.

And then finally, we need to go pick up all other assets, and the relevant factor is 100%, and so I just need to multiply by the sum of the other assets that I haven't already picked up.

So that's going to be the premises and equipment, goodwill, other intangibles, and other assets.

And if we add all of this together, we've got the total required stable funding.

Let's copy this to the right.

And now we are in a position to calculate the ratio.

So the net stable funding ratio compares the available stable funding with the required stable funding. And we can see that's 1.88 times for 2024 and 1.89 times for 2023.