A bank has the following balance sheet (values in million USD). The asset side of the...
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A bank has the following balance sheet (values in million USD). The asset side of the balance sheet has cash 200, interbank loans 100, residential mortgages 500, credit card loans 200, corporate loans short-term 500, corporate loans long-term 100, loan loss provisions-50, goodwill 50, and other assets 50. The liability side of the balance sheet has deposits 1000, senior debt 200, subordinated debt 50, borrowings 150 and convertible debt 25. The bank's net worth comprises preferred stock 25 and common stockholders' equity 200. Using necessary information, calculate the bank's capital adequacy ratio (CAR) and comment whether the bank is adequately capitalized. Tier I capital common equity + preferred stock - goodwill Tier Il capital subordinated debt + convertible debt + loan loss provisions Risk-weighted assets All assets that have risk Capital adequacy ratio (CAR) = (Tier I & Il capital) / Risk-weighted assets A bank has the following balance sheet (values in million USD). The asset side of the balance sheet has cash 200, interbank loans 100, residential mortgages 500, credit card loans 200, corporate loans short-term 500, corporate loans long-term 100, loan loss provisions-50, goodwill 50, and other assets 50. The liability side of the balance sheet has deposits 1000, senior debt 200, subordinated debt 50, borrowings 150 and convertible debt 25. The bank's net worth comprises preferred stock 25 and common stockholders' equity 200. Using necessary information, calculate the bank's capital adequacy ratio (CAR) and comment whether the bank is adequately capitalized. Tier I capital common equity + preferred stock - goodwill Tier Il capital subordinated debt + convertible debt + loan loss provisions Risk-weighted assets All assets that have risk Capital adequacy ratio (CAR) = (Tier I & Il capital) / Risk-weighted assets
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