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The Financial Modeller
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Banking and lending

Bank financial model, built free.

A three-statement Excel model for a bank, built from your own figures and checked to balance.

  • Free account
  • No card
  • Usually ready within the hour

We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Deposit-taking lender earning net interest income on loan portfolios funded by customer deposits, wholesale funding and equity, with growth and payouts constrained by regulatory capital.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued four ways

    Discounted cash flow, trading multiples, net asset value and financial institution equity valuation, side by side.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours: its structure and its inputs, ready for your own figures.

Annual · 10 years · Low detail
Bank sample model.xlsx
The How It Works sheet of the sample bank model

The sample describes no real business. Yours is calibrated to your own figures, so its results are your business’s.

How it works

How the model works for a bank.

  1. How it earns revenue3 formulas
    Loan yield and interest income · All loan portfolios
    Interest incomeAverage gross loansPortfolio yield (base rate + margin)share of the year
    Lending fees and charges · All loan portfolios
    Lending fee incomeEstablishment fees chargedAccount feesLine fees on undrawn limits
    Fee and commission income · Across the business
    Fee and commission incomeTransaction banking fee incomeOther fee and commission income
  2. What drives its costs3 formulas
    Origination and acquisition costs · All loan portfolios
    Broker-originated loans at the end of the periodBroker-originated loans at the start of the periodBroker-originated new lendingLess broker-originated loans repaid or written off
    Origination and acquisition costs · All loan portfolios
    Origination and acquisition costs incurredUpfront broker commissionOther origination costsTrail commission
    Expected credit loss and write-offs · All loan portfolios
    Credit loss expenseAverage gross loansCredit loss rate (% of average loans a year)share of the year
  3. What it invests in3 formulas
    Corporate fixed assets
    Capital expenditureRevenuefrom statementsCapex as % of revenueAdditional planned capex
    Corporate fixed assets
    DepreciationDepreciation of the opening asset baseDepreciation of new capex
    Corporate fixed assets
    Closing net book valueOpening net book valueCapital expenditureDepreciation
  4. How it is funded3 formulas
    Loan origination and runoff · All loan portfolios
    Closing gross loansOpening gross loansLoan book growthshare of the year
    Loan origination and runoff · All loan portfolios
    Net loans advanced (new lending less cash repayments)Closing gross loansOpening gross loansWrite-offs (net of recoveries)from expected credit loss and write-offs
    Loan origination and runoff · All loan portfolios
    New lendingClosing gross loansOpening gross loansRunoff (repayments and loans written off)
  5. How profit becomes cash3 formulas
    Income tax
    Closing tax lossesOpening tax lossesLosses usedLosses added
    Income tax
    Income tax expenseTaxable profitCorporate tax rate
    Income tax
    Closing tax payableOpening tax payableIncome tax expenseTax paid
What it covers

29 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • CPI forecastCPI glide path
  • Operating expensesOperating expense line items
  • Income taxCorporate rate with tax losses
  • Corporate fixed assetsStraight-line over remaining life
  • Dividends and distributionsPayout of net profit
  • Discounted cash flow valuationDCF on free cash flow to the firm
  • Multiples valuationPrice / NTA
  • Net asset valueBook net asset value
  • Deposit growth and mixDeposit mix by productCustomer deposit balances by product and the interest paid on them.
  • Wholesale funding and liquid assetsStructural hedge (replicating portfolio)Wholesale borrowings that fund the gap between assets and deposits plus equity, the liquid assets held for regulatory liquidity, and the interest on both.
  • Fee and commission incomeCash management, trade and correspondent feesNon-interest income from account, lending, card, trade and wealth fees.
  • Capital adequacy (CET1)Target CET1 with surplus distributionCommon equity tier 1 capital, total risk-weighted assets and capital ratios, and the surplus available for dividends or the shortfall to be raised.
  • Liquidity ratios (LCR and NSFR)Liquidity coverage ratio buildRegulatory liquidity ratios computed from the forecast balance sheet — the liquidity coverage ratio and the net stable funding ratio, or simpler liquidity holdings for small banks.
  • Financial-institution equity valuationCapital-constrained dividend discountEquity value of banks, insurers and other balance-sheet businesses, where debt is raw material rather than financing, so value comes from returns on equity, capital and distributable earnings.
  • Interest-rate hedgingHedged share at a fixed rate
  • LeasesLease register
  • Lender and bank key metricsNIM bridge by driverNet interest margin, spread, cost-to-income ratio, loss rate and returns for banks and lenders, and their drivers.
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Headcount and payrollFTEs by department x loaded cost
  • Case selectionStackable stress toggles
  • Value per shareTreasury-stock method
  • Interest-rate forecastMarket forward curve
  • Enterprise value to equity bridgeNet debt at the valuation date
  • Risk-weighted assetsIRB formulaCredit risk-weighted assets for each loan portfolio.
  • Loan origination and runoffBook growth rateGross loans rolled forward from new lending, scheduled repayments, prepayments and write-offs.
  • Loan yield and interest incomeBase rate plus marginInterest income earned on each portfolio from its yield, repricing and fees.
  • Lending fees and chargesFee schedule by event and accountFee income on a loan portfolio — establishment and application fees, monthly account fees, line and commitment fees on undrawn limits, late and default fees, discount and service fees on invoice finance, and early repayment charges.
  • Origination and acquisition costsUpfront and trail commission ratesCosts of winning each loan — broker upfront and trail commissions, dealer incentives, credit bureau, verification, valuation and settlement costs — expensed or deferred into the loan's effective yield.
  • Expected credit loss and write-offsLoss rate on average loansCredit loss expense, the expected credit loss allowance held against loans, and write-offs.
Key numbers

The numbers it tracks.

  1. 01net interest margin
  2. 02loan growth
  3. 03cost-to-income ratio
  4. 04credit losses to loans (bps)
  5. 05CET1 ratio
  6. 06LCR
  7. 07NSFR
  8. 08return on equity
  9. 09ROTE
  10. 10EPS
  11. 11dividend capacity
Used for

What it is used for.

Also used for
  • Scenarios and sensitivities
Related models

More in banking and lending.

Every financial services model

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The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.