Viewing Core Tier 1 Ratios In EU stress test data

The two charts below each give a different perspective the distribution of the core tier 1 ratios (CT1R) of all the banks in the EU stress test data.

Figure 1 shows the distribution of the CT1R of all the banks grouped by their home country. The UK’s 4 banks have very similar CT1R about the 10% mark. Other countries have a much wider range. In contrast, Spain’s banks’ CT1Rs vary over a wide range from 3.82% (CAJA DE AHORROS DEL MEDITERRANEO) to 22.2% (BANCA MARCH SA).

Figure 1 – This strip plot provides a useful summary of the distribution of the CT1Rs in a way that we can easily compare countries.

Figure 2 provides a different perspective. It shows the risk weighted assets (RWA), a measure of size, against the CT1R. Banks with data points in the bottom right of this chart are large banks with poor core tier 1 ratios and are perhaps of most concern. Santander for example has RWA of €600 billion and a core tier 1 ratio of just over 7%.

Figure 2 – This scatter plot highlights large banks with poor CT1Rs

Both charts are implemented in Tableau Public and are interactive – you can hover over each point to identify the bank and read the exact CT1R as in the snapshot below.
Scatter Plot Details show Brushing Of Single Item