What is the CET1 ratio?
When evaluating the capital stability of a bank, the so-called CET1 Ratio (the acronym of Common Equity Tier 1) is the most important indicator of its financial strength. The ratio, expressed as a percentage, is a measurement of a bank’s equity capital compared with its total risk-weighted assets.
But what does this mean in practice? The CET1 ratio provides a measurement of the resources with which the bank guarantees the loans it grants to its clients indicates and the risks represented by its non-performing loans.
CET1 ratio: the ECB requires a minimum threshold of 10.5% for Italian banks.
The ECB and EU authorities have decided that the ratio should be at least 8% in all countries, failing which the bank is placed under compulsory administration. Recently, this has been the case for a number of banks in Italy.
Each EU-member country has been assigned a minimum CET1 ratio for its banks. The general ratio assigned to Italian banks is 10.5%.
What ranking does BANCA FINNAT have in Italy?
On 31.12.22, the CET 1 ratio of Banca Finnat alone was 45.5%, the wider Group 34.5% and the consolidated ratio of parent company Nattino Holding was 29.3%. These figures are high considering that the ratio of Italian banks was, on average, 14.8% at the end of June 2022.
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