Vishnu Onshore Bank has $39 million in assets, with risk-adjusted assets of $29million. Core Equity Tier 1 (CET1) capital is $1,350,000, additional Tier Icapital is $550,000, and Tier II capital is $438,000. The current value of theCET1 ratio is 4.66 percent, the Tier I ratio is 6.55 percent, and the total capitalratio is 8.06 percent.Calculate the new value of CET1, Tier I, and total capital ratios for thefollowing transactions.a. Homeowners pay back $5.9 million of mortgages with loan-to-value ratiosof 50 percent and the bank uses the proceeds to build new ATMs.CET1 ratioTier I ratioTotal capital ratio%de do de%%H

Capital ratios are a measure of a bank's capital, which is the bank's source of funding, from…

Answered: Onshore Bank has $39 million in assets,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Onshore Bank has $39 million in assets, with risk-adjusted assets of $29 million. Core Equity Tier 1 (CET1) capital is $1,350,000, additional Tier I capital is $550,000, and Tier Il capital is $438,000. The current value of the CET1 ratio is 4.66 percent, the Tier I ratio is 6.55 percent, and the total capital ratio is 8.06 percent. Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. a. The bank issues $2.9 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. % % % CET1 ratio Tier I ratio Total capital ratio
A bank has $217 million in assets in the 0 percent risk-weight category. It has $223 million in assets in the 20 percent risk-weight category. It has $189 million in assets in the 50 percent risk-weight category and has $29 million in assets in the 100 percent risk-weight category. This bank has $28 million in Tier 1 capital and $56 million in Tier 2 capital. What is this bank's ratio of Tier 1 capital to total assets? Type your answer as percentage and not as decimal (i.e. 5.2 and not 0.052). Round to the nearest two decimals if needed. Do not type the % symbol.
A bank has an adjusted amount of $536 million in high-quality liquid assets, and $425 million in adjusted potential outflows, with an additional $75 million in adjusted derivative risk. What is the bank's LCR?
Onshore Bank has $32 million in assets, with risk-weighted assets of $22 million. Core Equity Tier 1 (CET1) capital is $1,000,000, additional Tier I capital is $340,000, and Tier II capital is $424,000. The current value of the CET1 ratio is 4.55 percent, the Tier I ratio is 6.09 percent, and the total capital ratio is 8.02 percent. Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $112,000 of common stock with cash. b. The bank issues $3.2 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 80 percent. c. The bank receives $512,000 in deposits and invests them in T-bills. d. The bank issues $812,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. e. The bank issues $2.2 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. f. Homeowners pay back $5.2 million of…
Njenge Bank has the following balance sheet (in millions) with the risk weights in parentheses. Assets Liabilities and Equity Cash (0%) K20 Deposits K175 OECD Interbank deposits (20%) K25 Subordinated debt (2.5 years) K3 Mortgage loans (50%) K70 Cumulative preferred stock K5 Consumer loans (100%) K70 Equity K2 Total Assets K185 Total Liabilities & Equity K185 In addition, the bank has K30 million in performance-related standby letters of credit (SLCs), and K300 million in six-year interest rate swaps. Credit conversion factors follow: Performance-related standby LCs 50%…
Njenge Bank has the following balance sheet (in millions) with the risk weights in parentheses. Assets Liabilities and Equity Cash (0%) K20 Deposits K175 OECD Interbank deposits (20%) K25 Subordinated debt (2.5 years) K3 Mortgage loans (50%) K70 Cumulative preferred stock K5 Consumer loans (100%) K70 Equity K2 Total Assets K185 Total Liabilities & Equity K185 In addition, the bank has K30 million in performance-related standby letters of credit (SLCs), and K300 million in six-year interest rate swaps. Credit conversion factors follow: Performance-related standby LCs 50%…
Njenge Bank has the following balance sheet (in millions) with the risk weights in parentheses: Assets Liabilities and Equity Cash (0%) K20 Deposits K175 OECD Interbank deposits (20%) K25 Subordinated debt (2.5 years) K3 Mortgage loans (50%) K70 Cumulative preferred stock K5 Consumer loans (100%) K70 Equity K2 Total Assets K185 Total Liabilities & Equity K185 In addition, the bank has K30 million in performance-related standby letters of credit (SLCs), and K300 million in six-year interest rate swaps.…
A bank has risk-weighted assets or $425 million and the following sources of regulatory capital (in $ millions): Allowance for Loan Losses $3.02 Common Stock (Par) $0.85 Intermediate-Term Preferred Stock $4.87 Perpetual Preferred Stock $3.43 Subordinated Debt $3.24 Surplus $7.83 Undivided Profit $20.04 What is the bank's ratio of Tier 2 capital to risk-weighted assets? _______ . Calculate the answer by read surrounding text. Express in %, to the nearest 0.01%; drop the % symbol.
Star Bank has the following asset portfolio on its balance sheet (and zero off-balance-sheet business). ASSETS Cash $100 Municipal Bonds $150 Residential Mortgages $250 Commercial Loans $500 $100 $1,100 Junk Bonds Total Assets VALUE CREDIT ($million) RISK WEIGHT 0% 20% 35% 100% 150% Star Bank has $57 million in Common Equity Tier 1 (CET1) capital. What is the bank's CET1 risk-based capital ratio (assuming there is no market risk or operational risk)? Select one: a. 8.2 percent O b. 7.43 percent O c. 5.7 percent O d. 5.18 percent
A bank has interest expense of $150 million, earning assets of $1.4 billion, and a net interest margin of 5.0%. The bank also has interest-bearing liabilities of $1.1 billion. The bank's spread ratio must be O 1.94% 1.10% 2.08% 1.65%
Waldorf Company has two sources of funds: long−term debt with a market and book value of $5,200,000 issued at an interest rate of 13%, and equity capital that has a market value of $4,200,000 (book value of $2,400,000). Waldorf Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 13%, while the tax rate is 35%. Operating Income Assets Current Liabilities St. Louis $480,000 $2,600,000 $110,000 Cedar Rapids $600,000 $4,000,000 $300,000 Wichita $1,020,000 $6,000,000 $600,000 What is the EVA® for St. Louis? (Round intermediary calculations to four decimal places.) BIG HINT: The Weighted Average Cost of Capital (WACC) is 10.48% or .1048
Calculate the proprietary ratio from the following information: Fixed Assets 12,80,000 Current Assets 7,20,000 8% Debentures 5,60,000 10% Mortgage loan 3,30,000 Bank overdraft2,20,000 Trade payabletrade 1,90,000

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