Tier 1 Capital Ratio

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Dictionary Says

Definition of 'Tier 1 Capital Ratio'

A comparison between a banking firm's core equity capital and total risk-weighted assets. A firm's core equity capital is known as its Tier 1 capital and is the measure of a bank's financial strength based on the sum of its equity capital and disclosed reserves, and sometimes non-redeemable, non-cumulative preferred stock. A firm's risk-weighted assets include all assets that the firm holds that are systematically weighted for credit risk. Central banks typically develop the weighting scale for different asset classes, such as cash and coins, which have zero risk, versus a letter or credit, which carries more risk. 
Investopedia Says

Investopedia explains 'Tier 1 Capital Ratio'

Regulators use the Tier 1 capital ratio to grade a firm's capital adequacy as one of the following rankings: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. A firm must have a Tier 1 capital ratio of 6% or greater, and not pay any dividends or distributions that would affect its capital, to be classified as well-capitalized. Firms that are ranked undercapitalized or below are prohibited from paying any dividends or management fees. In addition, they are required to file a capital restoration plan.
Search results for

'Tier 1 Capital Ratio'

  • Is Your Bank On Its Way Down?

    http://www.investopedia.com/articles/fundamental-analysis/09/tier-1-capital-ratio.asp
    Find out how the Tier 1 capital ratio can be used
    to tell if your bank is going under. ...

  • How Basel 1 Affected Banks

    http://www.investopedia.com/articles/07/BaselCapitalAccord.asp
    ... The first step of the agreement was thus to define it. Two-Tiered Capital Basil
    I defines capital based on two tiers: 1. Tier 1 (Core Capital): Tier 1 ...

  • Federal Government Got The TARP Just Right

    http://stocks.investopedia.com/stock-analysis/2008/Federal-Government-Got-The-TARP-Just-Right-RF-FHN-CYN1030.aspx
    ... City National will see its Tier 1 capital ratio increase to 12% from 9.1%. First
    Horizon will see its Tier 1 capital ratio go to 14.1% from 10.9%. ...

  • Colonial BancGroup Selloff An Overreaction

    http://stocks.investopedia.com/stock-analysis/2008/Colonial-BancGroup-Selloff-An-Overreaction-CNB1029.aspx
    ... Colonial BancGroup reported a Tier 1 Leverage ratio of 7.29%, a Tier 1 Risk-Based
    Capital ratio of 10% and a Total Risk-Based Capital ratio of 14.17%. ...

  • Assessing Bank Assets: Are Your Savings Safe?

    http://www.investopedia.com/articles/fundamental-analysis/09/assessing-bank-assets.asp
    ... safely have. Most banks and regulators use Tier 1 capital ratio to measure
    the capital adequacy of a bank. They expect sufficient ...

  • Avoiding British Banks On The Dole

    http://stocks.investopedia.com/stock-analysis/2008/Avoiding-British-Banks-On-The-Dole-BCS-HBC1016.aspx
    ... debt to sustain itself. The tier 1 capital ratio is tool used to determine
    a bank's financial strength. HSBC's strength was also ...

  • How PIIGS Defaults Could Affect The Markets - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1111/How-PIIGS-Defaults-Could-Affect-The-Markets.aspx
    ... (To learn more about how the Tier 1 Capital Ratio measure a bank's health, check
    out Is Your Bank On Its Way Down?) Sovereign Debt This brings us to bank ...

  • The Banking System: Commercial Banking - Key Ratios/Factors ...

    http://www.investopedia.com/university/banking-system/banking-system9.asp
    ... A bank's Tier 1 capital ratio takes a bank's equity capital and disclosed reserves
    and divides it by the bank's risk-weighted assets, (assets whose value is ...

  • Double-Digit Dividends: Can They Continue?

    http://stocks.investopedia.com/stock-analysis/2009/Double-Digit-Dividends-Can-They-Continue-BBT-CTL-RAI-USB0306.aspx
    ... The bank is well capitalized with a tier-1 ratio of 12%, and a tangible capital
    ratio of 5.2%. BBT is also mentioned as a "flight to quality" bank. ...

  • ING Capital Injection A Mere Booster Shot

    http://stocks.investopedia.com/stock-analysis/2008/ING-Capital-Injection-A-Mere-Booster-Shot1022.aspx
    ... What Happens Next The capital injection is an attempt to boost ING's Bank Tier-1
    ratio above 10% and lower its debt/equity ratio to 10% from the estimated 15 ...

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