On this page is a bank NSFR calculator or net stable funding ratio calculator. Enter a bank's available stable assets and required stable assets to see how the two compare.
The net stable funding ratio (or NSFR, or NSF ratio) is a bank liquidity ratio which compares stable funding (liabilities) a bank could draw versus potential funding a bank would need, such as deposits (assets). The ratio, along with the liquidity coverage ratio, came out of Basel III after the Great Financial Crisis of 2008-2009, where some banks found their presumed reliable funding sources dry up.
Individual countries have to determine exactly what makes up the two pools of funding. In the United States, read the FDIC, Federal Deposit Insurance Corporation's, final rules here.
The net stable funding ratio formula is:
Net\ Stable\ Funding\ Ratio=\frac{Available\ Stable\ Funding}{Required\ Stable\ Funding}Where:
For exact rules, check with the regulators in charge of a bank per country. In the United States, find the FDIC's guidelines in the Federal Register here [PDF].
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On this page is a bank LDR calculator or loans to deposits ratio calculator. Enter a bank's total loans and total deposits to see the loan to deposit ratio.
The loan to assets ratio is a temperature check and liquidity ratio for evaluating banks and depository institutions, showing how well a bank could cover withdrawals and loan losses. It's a useful adjunct to the reserve ratio, as banks need to maintain some cash on the books to match their deposit base.
The loan to deposit ratio formula is:
Loan\ to\ Deposit\ Ratio=\frac{Total\ Loans}{Total\ Deposits}Where:
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On this page is a bank LAR calculator or loans to assets ratio calculator. Enter a bank's total loans and assets to see the loan to asset ratio.
The loans to assets ratio is a basic measure of asset composition of a bank, quickly showing what percentage of asset son the books are dedicated to loans. A higher number might mean a bank's liquidity is lower, and more exposed to higher defaults.
The loans to assets ratio formula is:
Loans\ to\ Assets\ Ratio=\frac{Total\ Loans}{Total\ Assets}Where:
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On this page is a bank reserve ratio calculator. Enter a bank's cash and equivalents plus deposits on hold with a central bank, plus and creditor money in the form of deposits (or other forms) to compute the reserve ratio.
A bank reserve ratio is the proportion of customer deposits that a bank holds on its books. Any remaining capital is deployed to investments.
While – in theory, in good times – there's no minimum reserve ratio a bank needs to originate new loans or make other investments, the reserve ratio is important for depositor confidence. A healthy reserve ratio prevents a liquidity crisis in a bank, or a "bank run". On a national or global level, the reserve ratio is also an important part of open market operations – by setting minimum reserve ratios, central banks can slow down debt growth originating from banks.
In the United States, those minimum limits are set by the Federal Reserve. You can find the reserve ratio minimum for depository institutions in the United States here.
When the central bank of a country or economic institution sets a reserve ratio minimum, they are also setting a depository institution reserve requirement. That is, it implicitly sets a minimum amount of cash (and central bank deposits) banks have to hold.
For example, if a central bank sets the reserve ratio to a minimum of 10%, for every deposit a bank intakes, it has to reserve 10% in cash and deposits with the central bank. Institutions, in general, would need to hold 10%*their Deposit Base.
The capital adequacy ratio formula is:
Reserve\ Ratio=\frac{Cash\ \&\ Equivalents}{Deposits}Where:
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On this page is a bank capital adequacy ratio calculator. Enter the bank's reported Tier 1 and Tier 2 Capital and Risk-Weighted Assets to compute the Capital Adequecy Ratio.
A bank's capital adequacy ratio compares the proportion of its high quality liquid assets and other high-quality, yet not comparable assets to its total risk-weighted assets. The capital adequacy ratio and the capital types are defined by Basel III:
All of the measures that came out of Basel III aim to prevent another banking crisis of the form of the Great Financial Crisis in 2008-2009. The Capital Adequacy ratio was one of the ratios that came out of the global agreement, and it comes with a minimum (which has been ratcheted up a few times).
The Tier 1 Leverage Ratio calculator and Common Equity Tier 1 Capital Ratio calculator deal with only the highest quality assets, defined by Basel III.
The capital adequacy ratio formula is:
Capital\ Adequacy\ Ratio=\frac{Tier\ 1\ Capital+Tier\ 2\ Capital}{Risk-Weighted\ Assets}Where:
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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.
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.
The Common Equity Tier 1 Capital formula is:
Common\ Equity\ Tier\ 1\ Capital\ Ratio=\frac{Common\ Equity\ Tier\ 1\ Capital}{Risk-Weighted\ Assets}Where:
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On this page is a bank tier 1 leverage ratio calculator. Enter the bank's reported Tier 1 Capital and Total Assets to compute the Tier 1 Leverage Ratio.
A bank's Tier 1 leverage ratio is the percentage of its total assets which are classified as Tier 1 capital (highest quality and liquid). Tier 1 capital is defined by Basel III, and refers to high quality liquid assets which can be readily converted to cash if necessary – but not necessarily the highest quality assets, termed Common Equity Tier 1 Capital.
Basel III required a tier 1 leverage ratio greater than 3% [PDF] at phase-in, but always check the latest requirements.
The tier 1 leverage ratio formula is:
Tier\ 1\ Leverage\ Ratio=\frac{Tier\ 1\ Capital}{Total\ Assets}Where:
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On this page is a bank liquidity coverage ratio calculator. Enter the bank's high-quality liquid assets (HQLAs) and net cash flows to compute its liquidity coverage ratio.
The liquidity coverage ratio ensures banks have adequate high-quality assets to meet liquidity needs for a certain amount of time. The requirements come out of Basel III, and banks are currently required to maintain a liquidity ratio of greater than 100%, which implies then can meet liquidity needs for at least 30 days.
Both the minimum requirement (ratio and date) change from time to time, as does the definition of "high-quality liquid assets". Be sure to visit the above linked Basel III site for the latest, and read the US Federal Reserve's take, here.
The liquidity coverage ratio formula is:
liquidity\ coverage\ ratio=\frac{HQLA}{Total\ Net\ Cash\ Flows}Where:
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On this page is a bank efficiency ratio calculator. Enter the bank's non-interest expenses and total top-line revenue (or optionally, revenue net of loan-loss provisions) to compute its efficiency ratio.
A bank's efficiency ratio is an at-a-glance measure which shows you how a bank is converting its non-investment costs into total revenue. Ideally, this number should be as low as possible, which would mean a bank is generating much more in revenue than its non-investment input costs.
The efficiency ratio formula is:
efficiency\ ratio=\frac{non-interest\ expenses}{revenue}Where:
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On this page is a bank gross yield on earning assets calculator. Enter the bank's interest or investment income, and the current and last period earning assets to estimate the gross yield on earning assets.
The gross yield on earning assets is a bank performance metric which estimates the yield that a bank is earning in interest on its investments. By comparing interest and investment earnings to earning assets, you can estimate the gross yield. Netting out interest and investment expenses shows the closely related net interest margin.
The gross yield on earning assets can only be compared relatively – either to the bank itself in similar prevailing regimes, or to the bank's peers. A higher number is generally better, but note that a higher yield likely means a bank is taking on some sort of risk, or higher duration.
The gross yield on earning assets formula is:
gross\ yield\ on\ earning\ assets=\frac{interest\ income}{average\ earning\ assets}Where:
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