LDR Declines
EghtesdaOnline: The loan to deposit ratio (LDR) declined for eight months to November 22 by 82.4%, which was 1.1 percentage points lower than the beginning of the fiscal year in March at 83.2%, the Central Bank of Iran reported Thursday.
The ratio also was 1.3 percentage points higher from the same period of last year. LDR is used to assess a bank's liquidity by comparing the total loans to total deposits for a specific period and is expressed in percentage.
If the ratio is too high, the bank may not have enough liquidity to cover unforeseen fund requirements. Conversely, if the ratio is too low, the bank may not be earning as much as it should be.
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