Tier 1 Capital Ratios: Large European Banks

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
1	Barclays Bank	BCS	8.00%	UK
2	Llyods Bank	LYG	9.80%	UK
3	HSBC Bank	HBC	8.30%	UK
4	The Royal Bank of Scotland Group	RBS	9.90%	UK
4	ING Group	ING	9.70%	Holland
5	Banco Santander	STD	8.90%	Spain
6	Banco Bilbao Vizcaya	BBV	7.70%	Spain
7	Deutsche Bank	DB	10.20%	Germany
8	Commerzbank	CRZBY.PK	10.90%	Germany
8	Societe Generale	SCGLY.PK	9.20%	France
9	BNP Paribas	BNPQY.PK	8.40%	France
10	Danske Bank	DNSKY.PK	9.00%	Denmark
11	Swede Bank	SWDBY.PK	11.30%	Sweden
12	Erste Bank	EBKDY.PK	7.20%	Austria
13	Credit Suisse Group	CS	15.50%	Switzerland
14	UBS AG	UBS	10.50%	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 (EBKDY.PK) 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 (IRE) are stronger with relatively high Tier1 ratios.

Comments

[stocknerd:]

Unfortunately T1 does not tell all, especially the Irish banks. Ireland has to get money from EU, in the Billion range to bailout their banks. They are creating a "bad bank, good bank" scheme. Good luck. The irish economy is one of the worse in europe and all this bank help has to go through the Irish political system. Good luck. The Irish have clearly overspent like drunken banshees and will pay the price, plus interest for years to come. Good luck.

Jul 28 02:29 PM

[matthewAcop...:]

More than T1, it's important to keep in mind the ratio of non-performing assets to total capital. While a bank with asset quality issues may need a larger capital cushion -- resulting in a high T1 ratio -- a bank with better asset quality likely won't require as much of a cushion and may have a comparatively lower T1 ratio.

Jul 28 03:17 PM