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Please view the following balance sheet for the Bank of New Providence: ASSETS ($1,000,000s) LIABILITIES($1,000,000s) Cash $52 Deposits...

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Finance

Please view the following balance sheet for the Bank of NewProvidence:

ASSETS ($1,000,000s) LIABILITIES($1,000,000s)

Cash $52 Deposits $650

T-Bills and Bonds $257 Long-term Debt $326

Loans to Other Banks $95 Equity $88

Commercial Loans $364 Mortgages $296

TOTAL $1064 TOTAL $1064

The net profit for the bank was $10.3 million. The required CET1ratio is specified at 5% of risky assets. What is the Bank’s CET1ratio, and is it sufficient?

No; 4.9%

Yes; 11.7%

Yes; 15.9%

Yes; 8.3%

Insufficient data to determine.

Answer & Explanation Solved by verified expert
3.8 Ratings (383 Votes)
Answer Insufficient data to determine CET1 ratio Tier 1 Capital Risk Weighted Assets ie RWA Tier 1 capital Equity subtract goodwill from equity Noncumulative perpetual preferred stock RWA Assets value Risk Weight for the asset class In    See Answer
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