common equity Tier 1 capital ratio

问题如下：

Judith Yoo is a financial sector analyst writing an industry report.

Part of Yoo’s analysis focuses on Company XYZ, a global commercial bank, and its CAMELS rating, risk management practices, and performance. First, Yoo considers the firm’s capital adequacy as measured by the key capital ratios (common equity Tier 1 capital, total Tier 1 capital, and total capital) in Exhibit 1.

Based on Exhibit 1, Company XYZ’s capital adequacy over the last three years, as measured by the three key capital ratios, signals conditions that are:

选项：

mixed.

declining.

improving.

解释：

A is correct.

Company XYZ’s key capital adequacy ratios show mixed conditions. The ratios are calculated as follows:

Common Equity Tier 1 Capital Ratio=Total Common Equity Tier 1 Capital/Total Risk-Weighted Assets

2015 Common Equity Tier 1 Capital Ratio=137,100/1,242,500=11.0%

2016 Common Equity Tier 1 Capital Ratio=142,367/1,282,849=11.1%

2017 Common Equity Tier 1 Capital Ratio=146,424/1,298,688=11.3%

Tier 1 Ratio=(Common Equity Tier 1 Capital+Additional Tier 1 Capital)/ Total Risk-Weighted Assets

2015 Tier 1 Ratio=(137,100+17,600)/1,242,500=12.5%

2016 Tier 1 Ratio=(142,367+20,443)/1,282,849=12.7%

2017 Tier 1 Ratio=(146,424+22,639)/1,298,688=13.0%

Total Capital Ratio=Total Capital/Total Risk-Weighted Assets

2015 Total Capital Ratio=192,900/1,242,500=15.5%

2016 Total Capital Ratio=190,374/1,282,849=14.8%

2017 Total Capital Ratio=191,519/1,298,688=14.7%

The common equity Tier 1 capital ratio and the Tier 1 capital ratio both strengthened from 2015 to 2017, but the total capital ratio weakened during that same period, signaling mixed conditions.