This is an example of the breakdown which might be presented within the footnotes of a bank's financial statements.

It allows analysts to gain an understanding of the changes in makeup of the loan portfolio over time.

In this example, the size of the loan book has increased by just over 1.5% in total, but the breakdown allows us to see that there has been an increase in the percentage of the loan portfolio from the relatively lower risk commercial loans, since they are typically collateralized by the assets of the company, up 1.5% from 35.3 to 36.7%. And residential mortgages up from 30.9 to 31.3%.

This is combined with a reduction in weight held in the loan portfolio of more risky assets, with commercial real estate down by 1.4% from 14.3 to 12.9%, and other retail, which is typically unsecured, down from 11.9 to 11.1%.

In summary, it would appear that this bank is becoming less willing to lend to more credit risky borrowers.

The breakdown of the loan portfolio can also be presented on the basis of the non-performing loan ratio. From these data points, we can see that there has been an increase in loans either 90 days or more past due, and non-performing loans as a percentage of the total loan amount in each category, indicating an increase in the riskiness of the entire loan portfolio compared to the prior year.

We can, however, see that residential mortgages are the least risky, closely followed by commercial loans and other retail.

Commercial real estate and credit cards have the highest proportion of loans that are either classified as non-performing or over 90 days past due, consistent with these areas having higher credit risk.

So while there has been an overall increase in non-performing loans, the bank has a higher proportion of lower risk loans compared to the year before.