Question
Onshore Bank has $30 million in assets, with risk-adjusted assets of $20 million. Core Equity Tier 1 (CET1) capital is $1,000,000, additional Tier I capital
Onshore Bank has $30 million in assets, with risk-adjusted assets of $20 million. Core Equity Tier 1 (CET1) capital is $1,000,000, additional Tier I capital is $250,000, and Tier II capital is $420,000. The current value of the CET1 ratio is 5 percent, the Tier I ratio is 6.25 percent, and the total capital ratio is 8.35 percent. Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. The bank issues $810,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating.
The bank issues $810,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. (Round your answers to 2 decimal places. (e.g., 32.16)) CET1 ratio Tier I ratio Total capital ratio 8.87% 10.10 % 12.15%Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started