07/03/2014
Large banks progress in owners' equity
P { margin-bottom: 0.08in; } The major international banks are approaching their objectives under requirements for tier 1 equity under Basel III, the most recent report by the Basel Committee, released on 6 March, says. In six months, the sums that the major internationally active banks still need to raise to meet their owners’ equity objective of 7% has been reduced by half, according to the report. As of 30 June 2013, the major international banks still needed to raise EUR57.5bn, compared with EUR115bn six months earlier. This total includes surcharges applicable to banks considered to big to fail, which are required to have an additional owners’ equity cushion of 2.5%. To put these sums in perspective, the Basel Committee emphasizes that the sum of profits after taxes, but before distribution of dividends to shareholders, was EUR456bn for the banks studied overall. These figures are based on data collected from a sample of 102 major internationally active banks, the Basel Committee says, on the basis of its regular monitoring of this area.
