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The wholesale funding ratio shows reliance on a stated set of wholesale funding sources. Work the ratio from classified bank balances, reconcile the denominator and compare funding changes without implying a universal regulatory formula.
The wholesale funding ratio is defined wholesale funding divided by a clearly stated funding base. It shows how much a bank relies on the sources included in that definition. The classifications and denominator must accompany the percentage because there is no single universal formula behind the label.
This article uses a management funding-mix definition:
Wholesale funding ratio = Defined wholesale funding / Total deposit and borrowing funding × 100
Total deposit and borrowing funding = All deposits + All included nondeposit borrowings
The denominator includes interest-bearing and noninterest-bearing deposits, plus the specified borrowing instruments. It excludes accounting equity and operating liabilities such as accrued expenses. Wholesale deposits are already inside total deposits; adding wholesale funding to total deposits would count those deposits twice.
A different denominator can be valid when it answers a different question. The interagency funding and liquidity risk-management policy identifies wholesale funding to total liabilities as an example of a liability-dependency measure. That is a distinct ratio, not evidence that every wholesale-funding percentage uses total liabilities.
Give a recurring report a definition note with the reporting entity, date, currency, included funding categories and treatment of operating liabilities. Preserve that note with each export. It is part of the measure, not an optional explanation added after the percentage changes.
The FDIC liquidity and funds-management manual describes wholesale funds broadly, including brokered deposits, certain third-party deposit programs, listing-service deposits, FHLB advances, federal funds purchased and other borrowings. Do not assume that deposits outside a legal brokered-deposit category are automatically stable relationship funding.
Treasury should supply the approved funding classification. Finance should reconcile the amounts to the balance sheet. The export needs an instrument or account identifier, reporting date, carrying balance, deposit-or-borrowing category and wholesale flag. Add source or counterparty, maturity and collateral fields for the later interpretation.
In the example below, relationship deposits are classified outside wholesale funding. Brokered deposits, listing-service deposits and every listed borrowing are classified inside it. These are explicit example choices, not a rule that every institution must copy. No deposit belongs to more than one row.
An invented US bank compares June 30 with September 30, 2026. The two relationship-deposit rows are separate from the brokered and listing-service balances. Notes are outstanding liabilities, and no other funding instruments are omitted.
| Export category | Classification | June 30 (USD) | September 30 (USD) |
|---|---|---|---|
| Relationship noninterest-bearing deposits | Nonwholesale funding | 220,000,000 | 210,000,000 |
| Relationship interest-bearing deposits | Nonwholesale funding | 430,000,000 | 420,000,000 |
| Brokered deposits | Wholesale funding | 90,000,000 | 120,000,000 |
| Listing-service deposits | Wholesale funding | 40,000,000 | 50,000,000 |
| FHLB advances | Wholesale funding | 70,000,000 | 100,000,000 |
| Federal funds purchased and repurchase agreements | Wholesale funding | 40,000,000 | 60,000,000 |
| Senior notes | Wholesale funding | 30,000,000 | 40,000,000 |
| Subordinated notes | Wholesale funding | 20,000,000 | 20,000,000 |
| Operating liabilities | Excluded from funding denominator | 10,000,000 | 10,000,000 |
| Accounting equity | Excluded from funding denominator | 50,000,000 | 70,000,000 |
| Total assets, independent control | Balance-sheet control | 1,000,000,000 | 1,100,000,000 |
Sum each classification, then divide. Amounts below are computed from the component rows above; percentages are rounded to two decimal places after calculation.
| Calculation step | June 30 | September 30 |
|---|---|---|
| Nonwholesale deposits (USD) | 220,000,000 + 430,000,000 = 650,000,000 | 210,000,000 + 420,000,000 = 630,000,000 |
| Wholesale funding (USD) | 90,000,000 + 40,000,000 + 70,000,000 + 40,000,000 + 30,000,000 + 20,000,000 = 290,000,000 | 120,000,000 + 50,000,000 + 100,000,000 + 60,000,000 + 40,000,000 + 20,000,000 = 390,000,000 |
| Total funding (USD) | 650,000,000 + 290,000,000 = 940,000,000 | 630,000,000 + 390,000,000 = 1,020,000,000 |
| Wholesale funding ratio | 290,000,000 / 940,000,000 × 100 = 30.85% | 390,000,000 / 1,020,000,000 × 100 = 38.24% |
Wholesale balances increased by 390,000,000 - 290,000,000 = $100,000,000. Total funding grew by 1,020,000,000 - 940,000,000 = $80,000,000 because relationship deposits fell by 650,000,000 - 630,000,000 = $20,000,000. The ratio increased by 7.38 percentage points, calculated from the unrounded ratios.
That explains a funding substitution as well as growth. More wholesale funding supported a larger balance sheet while replacing some relationship deposits. It does not tell treasury which instruments will renew, at what cost, or against which collateral.
The funding subtotal must reconcile to an independent control rather than merely to its own component sum:
| Reconciliation (USD) | June 30 | September 30 |
|---|---|---|
| Total funding | 940,000,000 | 1,020,000,000 |
| Add operating liabilities | 10,000,000 | 10,000,000 |
| Total accounting liabilities | 950,000,000 | 1,030,000,000 |
| Add accounting equity | 50,000,000 | 70,000,000 |
| Reconstructed assets | 1,000,000,000 | 1,100,000,000 |
| Difference from reported assets | 0 | 0 |
Now change only the September denominator. The numerator remains $390,000,000:
| Measure | Calculation | Result |
|---|---|---|
| Wholesale / total funding | 390,000,000 / 1,020,000,000 × 100 | 38.24% |
| Wholesale / total liabilities | 390,000,000 / 1,030,000,000 × 100 | 37.86% |
| Wholesale / total assets | 390,000,000 / 1,100,000,000 × 100 | 35.45% |
No funding changed between those rows. Differences arise entirely from the base. When comparing branches, entities or peer banks, rebuild the ratio from summed balances under the same definition. The count-weighted and value-weighted guide explains why averaging reported percentages can misstate the combined result.
Treasury owns the funding interpretation, with finance responsible for reconciled balances and the asset/liability committee reviewing the implications. Break the wholesale total by maturity, funding source and collateral requirements. Identify which balances mature together and whether the bank can actually access alternative funds when needed.
Read the figure alongside bank liquidity ratios, which place funding against available assets and obligations. Use loan-to-deposit ratio for the separate question of lending relative to deposits. A reported accounting-equity buffer belongs in bank debt-to-equity analysis, with its own numerator boundaries.
There is no universal safe percentage implied by this example. A trend deserves investigation in the context of approved tolerances, cash-flow needs and the nature of the funding, rather than a conclusion based on the percentage alone.
Upload your classified deposit and borrowing reports with the matching balance sheet; Covirage maps the columns, and its tools compute funding shares and check the reconciliation. The external AI model explains the changes with every figure traced to its rows. Create a free Covirage account and bring a sample of your own data.
See Covirage for commercial banking teams for the industry context.
A bank's stated definition may include brokered and other third-party deposits, FHLB advances, federal funds purchased, repurchase agreements and other borrowings. Use approved instrument classifications and disclose the boundary. A legal brokered-deposit classification does not describe every funding source relevant to liquidity analysis.
Both denominators can appear in bank analysis, and a total-funding denominator is also possible. They produce different ratios from identical wholesale balances. Name the denominator in the report and preserve the same definition when comparing periods or peers.
The ratio alone cannot establish that conclusion. Consider contractual maturity, concentration, collateral requirements, market access and the assets being financed. Compare the result with the institution's approved risk tolerances and supporting liquidity analysis rather than a universal safety cutoff.