{"id":1571,"date":"2007-12-10T14:56:11","date_gmt":"2007-12-10T18:56:11","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1571"},"modified":"2007-12-10T14:56:11","modified_gmt":"2007-12-10T18:56:11","slug":"bank-regulatory-capital-summary-october-2007","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1571","title":{"rendered":"Bank Regulatory Capital : Summary, October 2007"},"content":{"rendered":"

This post will summarize the information previously given for the Big 6 Canadian Banks: RY<\/a>, BNS<\/a>, BMO<\/a>, TD<\/a>, CM<\/a>, & NA<\/a><\/p>\n

\n\n\n\n\n\n\n\n\n\n
Capital Structure
\nOctober, 2007<\/td>\n<\/tr>\n
\u00a0<\/td>\nRY<\/td>\nBNS<\/td>\nBMO<\/td>\nTD<\/td>\nCM<\/td>\nNA<\/td>\n<\/tr>\n
Total Tier 1 Capital<\/td>\n23,383<\/td>\n20,225<\/td>\n16,994<\/td>\n15,645<\/td>\n12,379<\/td>\n4,442<\/td>\n<\/tr>\n
Common Shareholders’ Equity<\/td>\n95.2%<\/td>\n81.5%<\/td>\n83.8%<\/td>\n131.5%<\/td>\n90.1%<\/td>\n95.0%<\/td>\n<\/tr>\n
Preferred Shares<\/td>\n10.0%<\/td>\n8.1%<\/td>\n8.5%<\/td>\n6.2%<\/td>\n23.7%<\/td>\n9.0%<\/td>\n<\/tr>\n
Innovative Tier 1 Capital Instruments<\/td>\n14.9%<\/td>\n13.6%<\/td>\n14.3%<\/td>\n11.1%<\/td>\n0%<\/td>\n11.4%<\/td>\n<\/tr>\n
Non-Controlling Interests in Subsidiaries<\/td>\n0.1%<\/td>\n2.5%<\/td>\n0.2%<\/td>\n0.1%<\/td>\n1.1%<\/td>\n0.4%<\/td>\n<\/tr>\n
Goodwill<\/td>\n-20.3%<\/td>\n-5.6%<\/td>\n-6.7%<\/td>\n-49.0%<\/td>\n-14.9%<\/td>\n-15.8%<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

Some readers might be interested in comparing these figures to CitiBank’s 3Q07 Report<\/a>: Tier 1 Capital was – after all the horrid writedowns, and before the $7.5-billion infusion – $92,370-million (USD). Total Tier 1 Capital for the Canadian Big 6 is $93,068-million (CAD). Citibank has no perpetual preferreds outstanding. They do have something in Tier 1 Capital called “Qualify mandatorily redeemable securities of subsidiary trusts” – frankly, I don’t know what those are.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
Tier 1 Issuance Capacity
\nOctober 2007<\/td>\n<\/tr>\n
\u00a0<\/td>\nRY<\/td>\nBNS<\/td>\nBMO<\/td>\nTD<\/td>\nCM<\/td>\nNA<\/td>\n<\/tr>\n
Equity Capital<\/td>\n(A)<\/td>\n17,545<\/td>\n15,840<\/td>\n13,126<\/td>\n12,931<\/td>\n9,448<\/td>\n3,534<\/td>\n<\/tr>\n
Non-Equity Tier 1 Limit<\/td>\n(B=A\/3)<\/td>\n5,848<\/td>\n5,280<\/td>\n4,375<\/td>\n4,310<\/td>\n3,149<\/td>\n1,178<\/td>\n<\/tr>\n
Innovative Tier 1 Capital<\/td>\n(C)<\/td>\n3,494<\/td>\n2,750<\/td>\n2,422<\/td>\n1,740<\/td>\n0<\/td>\n508<\/td>\n<\/tr>\n
Preferred Limit<\/td>\n(D=B-C)<\/td>\n2,354<\/td>\n2,530<\/td>\n1,953<\/td>\n2,570<\/td>\n3,149<\/td>\n670<\/td>\n<\/tr>\n
Preferred Y\/E Actual<\/td>\n(E)<\/td>\n2,344<\/td>\n1,635<\/td>\n1,446<\/td>\n974+250<\/td>\n2,931<\/td>\n400<\/td>\n<\/tr>\n
New Issuance Capacity<\/td>\n(F=D-E)<\/td>\n10<\/td>\n895<\/td>\n507<\/td>\n1,346<\/td>\n218<\/td>\n270<\/td>\n<\/tr>\n
\u00a0<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

It seems unlikely that we’ll see any RY issuance this year,\u00a0but any of the others appear to be able to top things up, if conditions are right. \u00a0<\/p>\n

We can now show the all important Risk-Weighted Asset Ratios!<\/p>\n

\n\n\n\n\n\n\n\n\n\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

Risk-Weighted Asset Ratios
\nOctober 2007<\/td>\n<\/tr>\n

\u00a0<\/td>\nNote<\/td>\nRY<\/td>\nBNS<\/td>\nBMO<\/td>\nTD<\/td>\nCM<\/td>\nNA<\/td>\n<\/tr>\n
Equity Capital<\/td>\nA<\/td>\n17,545<\/td>\n15,840<\/td>\n13,126<\/td>\n12,931<\/td>\n9,448<\/td>\n3,534<\/td>\n<\/tr>\n
Risk-Weighted Assets<\/td>\nB<\/td>\n247,635<\/td>\n218,300<\/td>\n178,687<\/td>\n152,519<\/td>\n127,424<\/td>\n49,336<\/td>\n<\/tr>\n
Equity\/RWA<\/td>\nC=A\/B<\/td>\n7.09%<\/td>\n7.3%<\/td>\n7.35%<\/td>\n8.48%<\/td>\n7.41%<\/td>\n7.16%<\/td>\n<\/tr>\n
Tier 1 Ratio<\/td>\nD<\/td>\n9.4%<\/td>\n9.3%<\/td>\n9.51%<\/td>\n10.3%<\/td>\n9.7%<\/td>\n9.0%<\/td>\n<\/tr>\n
Capital Ratio<\/td>\nE<\/td>\n11.5%<\/td>\n10.5%<\/td>\n11.74%<\/td>\n13.0%<\/td>\n13.9%<\/td>\n12.4%<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

TD’s figure needs to be taken with a grain of salt; their takeover of Commerce Bancorp is expected to reduce Tier 1 Capital to the 8.75%-9.00% range; presumably with a similar effect on the Equity Ratio and Total Capital Ratio.<\/p>\n

Otherwise, it is interesting to note that CM has the best protected Preferreds (with “protection” defined solely in terms of the regulatory risk-weighted-assets and capital that is junior to preferreds) while RY has the least protected.<\/p>\n

And again, for those interested, Citibank had (at the third quarter 2007) a Tier 1 Ratio of 7.32% and a Total Capital Ratio of 10.61%. It should be noted that regulatory ratios are not directly comparable between regulators, as the regulators have a certain amount of discretion in applying the internationally agreed guidelines.\n<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

This post will summarize the information previously given for the Big 6 Canadian Banks: RY, BNS, BMO, TD, CM, & NA Capital Structure October, 2007 \u00a0 RY BNS BMO TD CM NA Total Tier 1 …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-1571","post","type-post","status-publish","format-standard","hentry","category-regulatory-capital"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1571"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1571\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}