Tier 1 Common Equity Capital Ratio

Glossary

Banking

Tier 1 Common Equity Capital Ratio

Tier 1 common equity capital ratio is a measurement of a bank\'s core equity capital, compared with its total risk-weighted assets, and signifies a bank\'s financial strength. Tier 1 common equity capital excludes any preferred shares or non-controlling interests, which makes it differ from the closely-related tier 1 capital ratio. A bank’s Common Equity Tier 1 (CET1) capital ratio is the ratio of its CET1 capital (see Tier 1 capital) to its total risk-weighted assets.

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