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Tier 1 Capital Ratio Calculator

Work out tier 1 capital ratio instantly with clear inputs, formula shown and shareable results.

About Tier 1 Capital Ratio Calculator

Common equity Tier 1 is the highest quality capital — ordinary shares and retained earnings — and carries the strictest minimum once buffers are added. Additional Tier 1 instruments count towards total Tier 1 but not towards the common equity test.

Formula

Tier 1 ratios

CET1 ratio = CET1 / RWA; Tier 1 ratio = (CET1 + AT1) / RWA

Worked example

With the default values below, Tier 1 Capital Ratio Calculator returns Common Equity Tier 1 Ratio of 8.6667%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Common Equity Tier 1minimum 0
78,000,000
Additional Tier 1minimum 0
12,000,000
Risk Weighted Assetsminimum 0
900,000,000
CET1 Minimum Including Buffersaccepts 4–15 %
8 %

Results

Common Equity Tier 1 Ratio
8.6667%
Total Tier 1 Ratio
10.0000%
Headroom Over The Minimum In Basis Points
66.7
Surplus Common Equity
$6,000,000.00

Step by step

  1. 1Values used
  2. 2Tier 1 ratios
  3. 3Common Equity Tier 1 Ratio= 8.6667
  4. 4Total Tier 1 Ratio= 10.0000
  5. 5Headroom Over The Minimum In Basis Points= 66.7
  6. 6Surplus Common Equity= 6,000,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Why is common equity treated separately?

It absorbs losses on a going-concern basis without triggering default, which other instruments cannot reliably do.

What happens if buffers are breached?

Distributions and bonuses are restricted before any question of insolvency arises — that is the buffer's purpose.

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