Work out tier 1 capital ratio instantly with clear inputs, formula shown and shareable results.
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.
Tier 1 ratios
CET1 ratio = CET1 / RWA; Tier 1 ratio = (CET1 + AT1) / RWA
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.
It absorbs losses on a going-concern basis without triggering default, which other instruments cannot reliably do.
Distributions and bonuses are restricted before any question of insolvency arises — that is the buffer's purpose.