When considering bank leverage and risk need to consider a wide...

When considering bank leverage and risk need to consider a wide range of factors inclusive of the level of provisions against loan impairment and how reasonable these are in size compared to the risks taken on the book, the type of lending conducted, the risk management approach and concentration risk across borrower type (e.g. individuals, SME, Corporates, Institutions, Sovereigns) and the recourse level (e.g. the level of provisions needed will vary massively between secured and unsecured lending). On a further side note loan assets shown on a bank balance sheet are normally reported net of write offs and credit provisioning, e.g. VMUK credit provisions on the loan book were 504m pounds as at Sep 21. Also the carrying value will also be after write offs made in previous years. This is a fairly complex and lengthy area to outline in a post and the risks in bank are not confined just to credit risks but also a range of other risks such as funding composition and sources, operational and systems risks, management ability and oversight and cashflow management on a day to day basis (I.e. liquidity risk). For those interested in full analysis this is available on the VMUK website under pillar 3 disclosure (54 pages of bedtime reading to get you to sleep). Also the consensus analyst estimates are also available there. I would also note that the debt book is mainly retail secured (mortgage) lending, full break down is on the annual report and pillar 3 disclosure.