Question 1 (15 marks) Worldwide Bank has the following balance sheet (in millions) and has $50 million commercial letter of credit. Assets Cash Treasury bills Single family mortgage $1,425 $70 $70 Liabilities and Equity $100 Deposits $160 8-year Subordinated debts $720 Noncumulative perpetual preferred stock $680 Common stock ($20) Retained earnings $1,640 Total $45 Consumer loans Allowance for loan losses Total $30 $1,640 10% of mortgage has been overdue for more than 90 days. (a) Calculate the following figures: (i) Risk-adjusted assets. (2 marks) (ii) CET1 risk-based capital ratio (in %). (2 marks) (iii) Tier I risk-based capital ratio (in %). (2 marks) (iv) Tier II capital. (2 marks) (v) Total risk-based capital ratio (in %). (2 marks) (vi) Tier I leverage ratio (in %). (2 marks) (b) HSBC announced stop paying final dividend in 2020 and dividends for the first three quarters in 2021 in response to the order made by the UK regulator. Explain the rationale of the regulator. (3 marks) Question 1 (15 marks) Worldwide Bank has the following balance sheet (in millions) and has $50 million commercial letter of credit. Assets Cash Treasury bills Single family mortgage $1,425 $70 $70 Liabilities and Equity $100 Deposits $160 8-year Subordinated debts $720 Noncumulative perpetual preferred stock $680 Common stock ($20) Retained earnings $1,640 Total $45 Consumer loans Allowance for loan losses Total $30 $1,640 10% of mortgage has been overdue for more than 90 days. (a) Calculate the following figures: (i) Risk-adjusted assets. (2 marks) (ii) CET1 risk-based capital ratio (in %). (2 marks) (iii) Tier I risk-based capital ratio (in %). (2 marks) (iv) Tier II capital. (2 marks) (v) Total risk-based capital ratio (in %). (2 marks) (vi) Tier I leverage ratio (in %). (2 marks) (b) HSBC announced stop paying final dividend in 2020 and dividends for the first three quarters in 2021 in response to the order made by the UK regulator. Explain the rationale of the regulator