Based on regulations by the Monetary Authority of Singapore (MAS), no more than 2% of total capital can be in the form of additional tier 1 (AT1) and tier 2 capital. UOB’s ratio is well below that.
With the global focus on bank capital, United Overseas Bank (UOB) (SGX:U11
) announced that its common equity tier 1 (CET1) rebounded to 14% in 1QFY2023 ended March 31 compared to 13.3% in 4Q2022 and 13.1% in 1Q2022.
When UOB announced its Citigroup acquisition in January 2022, the pro forma CET1 based on FY2021 would have translated to around 12.8%. However, as earnings accrete to shareholders’ funds coupled with mark-to-market gains of its modest portfolio of available for sale (AFS) securities and high-quality liquid assets (HQLA), CET1 increased by around $1.7 billion q-o-q and around $1 billion y-o-y as at 1Q2023.
