Bank Capitalization Summary: 3Q08

The Big-Six banks have now all released their 2Q08 financials. The results may now be summarized, with the links pointing to the PrefBlog posts reporting on the quarterly reports:

Big-6 Capitalization Summary
Equity Capital A 17,892 16,310 13,609 13,563 8,695 3,930
Preferreds Outstanding B 2,552 2,560 1,996 2,175 2,931 774
Issuance Capacity C 1,400 1,671 1,386 1,877 790 78
Equity / Risk Weighted Assets D 7.04% 7.22% 7.47% 7.34% 7.33% 7.07%
Tier 1 Ratio E 9.5% 9.8% 9.9% 9.5% 9.8% 10.0%
Total Capital Ratio F 11.7% 11.5% 12.3% 13.4% 14.4% 13.9%
Assets to Capital Multiple G 19.4x 17.8x 15.9x 17.9x 17.7x 15.7x
A is a measure of the size of the bank
B is … um … how many preferreds. Are outstanding
C is how many more (million CAD) they could issue if they so chose
D is a measure of the safety of the preferreds – the first loss buffer, expressed as a percentage of their Risk-Weighted Assets. Higher is better. It may be increased by issuing common (or making some money and keeping it); preferred issuance will not change it.
E is the number that OSFI and fixed-income investors will be watching. Higher is better, and it may be increased by issuing preferreds.
F is less sexy than E, but still important.
G is even less sexy than F, but PAY ATTENTION!

One Response to “Bank Capitalization Summary: 3Q08”

  1. […] of loss and making them more equity-like. Investors will have to pay increased attention to the Equity / Risk Weighted Assets Ratio than they have in the […]

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