We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Are the Different Types of Commercial Bank Assets?

By Osmand Vitez
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Commercial bank assets — like assets of other companies — are items that bring value to the bank. Each commercial bank creates a monthly, quarterly, or annual balance sheet that lists in detail the assets owned. The major asset categories include cash, securities, and loans, with several subcategories or other classes possible under the larger groups. In short, commercial bank assets represent the items that make up the economic wealth of the institution, with net economic wealth being total bank assets less total bank liabilities. The health of a commercial bank is often determined from the balance sheet of the institution.

Cash is typically the number one asset on a commercial bank’s balance sheet, primarily because it is the most liquid asset for the institution. For a commercial bank, cash represents the money generated from interest-bearing accounts or money placed into financial investments. In some cases, commercial bank assets that list cash sources may also include cash held at other financial institutions. Commercial banks often leave cash at these other institutions in order to generate interest or other financial returns. Disclosures or different lines items for cash at other banks are necessary on the commercial bank’s balance sheet.

Many banks invest their cash in market securities, which can include bonds and securities issued by other companies or organizations. These items represent assets, though they are not cash and may or may not be highly liquid. Therefore, different lines on the balance sheet are necessary to properly define commercial bank assets. In most cases, the bank lists these assets in order of liquidity, with the most liquid first and the least liquid last. Other designations for investments and securities may be necessary to fully inform stakeholders about these assets.

Long-term assets often fall under the category of loans and other monies given to individuals and businesses. Common subgroups in a commercial bank’s loan portfolio include mortgages, auto loans, business loans, and other types of loans made for a specific purpose. The principal balance of the loan is typically the main part of these commercial bank assets. Interest generated from the loans fall under the income statement revenue accounts, which is completely separate from the assets listed on the balance sheet. Toxic assets represent loans that are no longer generating interest payments; banks may need to lower the return on these loans and in some cases write them off as they no longer hold value.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Link to Sources
Discussion Comments
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.