It should come to no one’s surprise of the recent news that J.P. Morgan (JPM) is the number one bank in the world last year, due to their capital adequacy or their Tier 1 ratio according to The Banker magazine and reported by Reuters. Tier 1 is the most relevant measurement of bank strength.
Top Foreign Stocks (David Hunkar) listed the top U.S. banks with highest Tier 1 in the most recent quarter (based on 1st quarter reports):
Rank Bank Tier 1 Ratio
1 State Street (STT) 19.13%
2 Bank of New York Mellon (BK) 13.80%
3 BB&T (BBT) 12.10%
4 Citibank (C) 11.80%
5 JPMorgan Chase (JPM) 11.30%
6 KeyCorp (KEY) 11.16%
7 Suntrust (STI) 11.00%
8 US Bank (USB) 10.90%
9 Fifth Third Bank (FITB) 10.90%
10 Regions Financial (RF) 10.37%
11 PNC Bank (PNC) 10.20%
12 Bank Of America (BAC) 10.09%
13 Wells Fargo (WFC) 8.28%
As banks are starting to repay the TARP funds infusion that they received, we should pay careful attention to the bank’s Tier 1 ratios this upcoming earning season – as this will give us a clear picture on how banks are building their capital reserve to offset the continuing credit losses.
Thursday, June 25, 2009
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