Common Equity Tier 1 Capital Ratio Calculator

Written by:
PK

On this page is a common equity tier 1 capital ratio or CET1 ratio calculator. Enter the bank's reported Common Equity Tier 1 Capital and Risk-Weighted Assets to compute the Common Equity Tier 1 Capital Ratio.

Common Equity Tier 1 Leverage Ratio Calculator

What is the Common Equity Tier 1 Capital ratio?

A bank's Common Equity Tier 1 Capital ratio compares a bank's very highest quality liquid asset holdings to its reported risk-adjusted assets. Tier 1 capital is defined by Basel III, and Common Equity Tier 1 Capital is the highest quality of tier 1. The Tier 1 Leverage Ratio is another measure with minimum requirements from Basel III, and compares all Tier 1 Capital to Total Assets.

Basel III asset quality tiers
Asset quality tiers (Basel III)

Common Equity Tier 1 Capital Ratio Formula

The Common Equity Tier 1 Capital formula is:

Common\ Equity\ Tier\ 1\ Capital\ Ratio=\frac{Common\ Equity\ Tier\ 1\ Capital}{Risk-Weighted\ Assets}

Where:

  • Common Equity Tier 1 Capital – The highest quality liquid assets, as defined by Basel III.
  • Risk-weighted Assets – Risk-weighted assets reported by a bank.

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PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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