kärnkapitalandel

kärnkapitalandel, often translated as core equity ratio, is a financial metric used primarily by banks and other financial institutions to assess their financial strength and resilience. The ratio measures the proportion of a bank’s core equity capital to its risk‑weighted assets. Core equity capital typically includes common equity tier 1 capital, which consists of common shares and retained earnings, and may also incorporate additional instruments that meet regulatory criteria for loss‑absorbing capacity. Risk‑weighted assets are calculated by assigning a risk weight to each asset class, reflecting the likelihood of default or loss.

The formula for computing the kärnkapitalandel is: core equity capital divided by risk‑weighted assets, expressed as a percentage. A higher ratio indicates that a bank holds more high‑quality capital relative to the risks it faces, thereby improving its ability to absorb losses during periods of financial stress. Central banks and supervisory authorities, such as the European Banking Authority, often set minimum thresholds for this ratio in Basel III and other regulatory frameworks to promote stability in the banking sector.

In addition to regulatory compliance, the kärnkapitalandel is a key indicator for investors and rating agencies. It informs assessments of a bank’s solvency, creditworthiness, and potential to service shareholder and debt obligations. Analysts may compare the ratio across institutions within the same market or track changes over time to gauge a bank’s capital adequacy trajectory.

While the core equity ratio provides valuable insights, it should be considered alongside other metrics, such as the total equity ratio, liquidity coverage ratio, and profitability measures. Together, these indicators offer a more comprehensive picture of a financial institution’s risk profile and overall health.