CAR-NBD & NBAD - the strength of the total capital...

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Capital Adequacy Ratio (CAR) Tier 1 Capital +Tier 2 Capital CAR Risk Adjusted Assets = NBD(000 AED) NBAD(000 AED) Tier 1 Capital 20,380,569 14,988,910 Tier 2 Capital 4,335,021 2,415,182 Risk Adjusted Assets 217,285,578 126,940,146 CAR 11.4% 13.7%
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Interpretation Both NBD as well as NBAD fulfill the norms of Basel II and the CAR is above 10% but of the two banks, NBAD is doing better than NBD as its CAR is higher than NBAD. Tier I capital is more stable one and represents
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Unformatted text preview: the strength of the total capital structure. • Tier II is supplementary capital and often includes reserves and subordinate capital. It also protects the depositors but can be withdrawn. • Both the banks are well capitalized. Contd. . Interpretations • A good CAR indicates that the bank is able to protect the interests of the investors. • The Tier I capital absorbs the inherent risk and they avoid the risky schemes....
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CAR-NBD & NBAD - the strength of the total capital...

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