Analysis of banks' income statements

Generally, operating profit before provisions, taxes and extraordinary items better reflect underlying profitability. Loan loss provisions are a financial outflow, although a non-cash expense. They are listed seperately from non-interest expense. Specific loan loss provisioning General loan loss provisioning Provisioning - income statement item Provision - cumulative, BS item Fundling liabilities can be broadly divided into customer deposits and purchased funds. Custoemr deposits reprsent retail deposits, while purchased funds are made up of commercial deposits(often in the form of large denomination certificates of deposit), and interbank and other borrowings.