1.Mercantile Bank has the following balance sheet (in millions of dollars) and has no off-balance-sheet or securitisation activities.

What is the value of the regulated capital measures (i.e. common equity Tier 1, total Tier 1, total capital)?
What is the value of credit-risk-weighted assets?
Assuming that operational risk and market risk are zero, calculate the three capital adequacy ratios. LO 18.5 , 18.6 , LO 18.7

Transcribed Image Text:

Cash Australian Treasury Bonds Non-insured residential mortgages with LVR of 84% Other loans Total assets Assets $20 Deposits Liabilities and equity $980 40 Subordinated debt 40 600 Ordinary shares 40 430 Retained earnings 30 $1090 Total liabilities and equity $1090