The ratio of loans extended to customers carried at amortized cost net of provisions for impairment losses and excluding reverse repurchase agreements related to customer deposits excluding repurchase agreements. In equation form:

Loans deposit ratio = adjusted loans – adjusted deposits

Adjusted loans represent total amount of loans carried at amortized cost net of impairment loss provisions and excluding reverse repo transactions (on the asset side).

Adjusted deposits are total amount of deposits excluding amounts related to repo transactions (on the liability side).

The loan deposit ratio (also, loan-to-deposit ratio) is used to assess a bank’s liquidity by relating its total loans to its total deposits for the same period.