Last month we reviewed the Tier 1 Capital Ratios of Large US Banks. Most of them had Tier 1 ratios in the 10% range based on data from first quarter. Today let's take a look at the Tier 1 ratios of large European banks:
|S.No.||Name||Ticker||Tier 1 Ratio||Country|
|4||The Royal Bank of Scotland Group||RBS||9.90%||UK|
|6||Banco Bilbao Vizcaya||BBV||7.70%||Spain|
|13||Credit Suisse Group||CS||15.50%||Switzerland|
|15||National Bank of Greece||NBG||10.40%||Greece|
|16||Allied Irish Bank||AIB||7.40%||Ireland|
|17||Govt. Bank of Ireland||IRE||12.60%||Ireland|
Note: The data shown here is the latest available from company websites. It may reflect end of 2008 or Q1 2009 earnings report. All data is known be accurate but please do your own research before making investment decisions.
One of the ratios that can be used to identify the strength of a bank is the Tier 1 Capital Ratio. Unlike other ratios, Tier 1 is the most commonly published ratio by many banks around the world.
Despite government infusions of billions of pounds, British banks still have Tier 1 ratios under 10%. While Erste bank (OTCPK:EBKDY) of Austria has high East European exposure, the bank received a 2.7B euro capital infusion from the government. The deal was favorable to Erste because it sold the government non-voting securities, redeemable after five years, on an 8.0% rate of interest. The shares were also non-dilutive to existing shareholders. Erste will have to increase its Tier 1 capital ratio from the current 7.20%. The Swiss, German, Greek and Government Bank of Ireland (NYSE:IRE) are stronger with relatively high Tier1 ratios.