CET1 ratio of the largest U.S. banks Q2 2023

In the second quarter of 2023, the U.S. branch of Canadian Toronto-Dominion (TD) Bank had the highest common equity tier 1 (CET1) capital ratio among the largest banks operating in the United States, ranked by total assets. The bank was the 14th largest bank in the world by market capitalization in 2022, and had a CET1 capital ratio of 17 percent, which was well above the required level of 4.5 percent. The largest bank in the United States, JPMorgan Chase, had a CET1 capital ratio of 13.82 percent.

What is CET1 capital ratio?

The CET1 capital ratio requirement is mandated under Basel III, which is an internationally agreed upon set of measures created by the Basel Committee on Banking Supervision to ensure stability in the global banking sector. All banks and other financial institutions must set aside enough capital to cover unexpected losses and remain solvent in a crisis. They should hold enough capital to equal at least eight percent of risk-weighted assets, and the highest quality capital - common equity tier 1 - should make up at least 4.5 percent of risk-weighted assets. These measures were developed in response to the financial crisis of 2007-2009. JPMorgan Chase had the highest level of Tier 1 capital among all banks in the United States in 2022.

Worldwide tier 1 capital levels of banks

Despite JPMorgan Chase’s high Tier 1 capital level, it is only the fifth highest compared to banks worldwide. The four Chinese banks - ICBC, China Construction Bank, Agricultural Bank of China, and Bank of China - all had higher levels. ICBC had the highest tier 1 capital in the world in 2022.