In this workout, we're going to calculate the loan-to-deposit ratio for 2022 to 2024, and we've been presented with the following information.

We've been given information about the bank's loan portfolio, so that's been broken down between commercial, commercial real estate, residential mortgages, credit card, and other retail.

And that gives us total loans for every year.

We've also been given the allowance for loan losses and then the net loan balance.

Below that, we've got information on the total liabilities of the bank. So we've got the non-interest-bearing deposits, interest-bearing deposits, and then non-deposit financing, so short-term borrowings and long-term debt.

So to work out the loan-to-deposit ratio, we need to take the total loan balance, and I'm picking up the total loans before the allowance for loan losses, and we need to divide that by the total deposits, and so we need to pick up both the non-interest-bearing and interest-bearing deposits.

And then copy to the right for the other two years.

What do we notice here? We can see that this ratio has remained relatively stable over the three-year period. But what we can't see just by looking at this ratio is that there's been a change in the mix of interest-bearing and non-interest-bearing deposits.

So if we just do a quick calculation on the right-hand side here to see that point. If I take the interest-bearing deposits as a percentage of the total deposits, and I then do that for all three years, we can see from 2022 to 2023, there was quite a big increase in the proportion of interest-bearing deposits out of the total, and that can't be observed directly by looking at the loan-to-deposit ratio.