Assets Growth Rate

The Total Assets of a financial institution include all line items on the institution’s balance sheet that earn revenue. These items will usually include loans outstanding, securities and cash. The Asset Growth Rate compares the Total Assets held by that institution in a given period to its Total Assets from a previous period. It is usually measured on both a yearly and a quarterly basis.

While the Total Assets are the most popular measure of the size of one financial institution in comparison to another, Asset Growth Rate is a key performance indicator (KPI) used to evaluate a bank growth over time. It specifically measures the rate at which the value of a financial institution’s assets is increasing. Historical growth rate data is a good predictor of future behaviour, since on a long-term basis, assets are expected to behave consistently.

To calculate the year-over-year Asset Growth Rate, the Total Assets from the same quarters of two consecutive years are found. Then, that Total Assets figure from the current year is subtracted from the Total Assets figure from the previous year. That value is then divided by that Total Assets amount from the previous year.