what is an ideal ldr 
typically the ideal loan to deposit ratio is 80 to 90 a loan to deposit ratio of 100 means a bank loaned one dollar to customers for every dollar received in deposits it received it also means a bank will not have significant reserves available for expected or unexpected contingencies regulations also factor into how banks are managed and ultimately their loan to deposit ratios the office of the comptroller of the currency the board of governors of the federal reserve system and the federal deposit insurance corporation do not set minimum or maximum loan to deposit ratios for banks however these agencies monitor banks to see if their ratios are compliant with section 109 of the riegle neal interstate banking and branching efficiency act of 1994 interstate act 1example of how to use the ldrif a bank has 500 million in deposits and 400 million in loans the bank s ldr ratio would be calculated by dividing the total loans by its total deposits ldr 4 0 0 million 5 0 0 million 8 8 0 begin aligned text ldr frac 400 text million 500 text million 8 80 end aligned ldr 500 million 400 million 8 80 the difference between the ldr and the ltv ratiothe loan to value ltv ratio is an assessment of lending risk that financial institutions and other lenders examine before approving a mortgage typically assessments with high ltv ratios are higher risk and therefore if the mortgage is approved the loan costs the borrower more the ltv ratio measures the value of the property versus the amount of the loan while the ldr measures a bank s ability to cover its loans with its deposits limitations of using the ldrthe ldr helps investors assess the health of a bank s balance sheet but there are limitations to the ratio the ldr does not measure the quality of the loans that a bank has issued the ldr also does not reflect the number of loans that are in default or might be delinquent in their payments as with all financial ratios the ldr is most effective when compared to banks of the same size and similar makeup also it s important for investors to compare multiple financial metrics when comparing banks and making investment decisions 