Banks are different from other firms, so I am not sure how shareholders (those with equity) of banks get paid their dividends. Asset minus liabilities figure do make sense in ordinary firm cases, but bank's assets are mostly loans, and liabilities are mostly deposits, which seem to make things really complicated.

2 Answers 2


Why? Balance sheet is balance sheet, why is it complicated? Bank shareholders get dividends in exactly the same way as any other company shareholders do: the company ends up with net profits, which the board of directors decides to distribute to shareholders based on certain amount per share. If at all.

Not all the profits are distributed, and in fact - there are companies who don't distribute dividends at all. Apple, for example, hasn't ever distributed dividends until very very recently.


A typical manufacturer buys raw materials, produces a product using labor and energy at a specific cost with some waste, and then sells the product to produce income.

A bank buys raw materials (deposits) by paying interest, then uses labor and energy to turn a portion of the raw materials into their product (loans), they then receive income (interest) on those loans. If the income exceeds the cost to buy and produce the loans taking into account losses due to delinquencies (waste) the bank company has made a profit.

The growing profits can lead to an increase in stock prices or the paying of dividends. The search for more raw materials can lead to paying more for the raw materials, or by buying other factories (branches) or even other bank companies.

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