Tier 1 Capital-

It consists of shareholders’ equity and retained earnings. It is a bank’s core capital and a primary
indictor to check banks financial health. These funds hold all bank’s accumulated funds.

(In millions)
Tier 1 Capital 19-20 20-21 21-22
Common Equity Tier 1 capital: instruments and reserves

Directly issued qualifying common share capital plus related 17,361.7 19,761.7 19,761.7
stock surplus (share premium) 0 0 0
32,171.1 32,815.4 31,620.1
Retained earnings 0 4 6
Accumulated other comprehensive income (and other
5,207.13
reserves) 3,227.72 3,529.56

52,760.5 56,106.7 56,588.9

Common Equity Tier 1 capital before regulatory adjustments 2 0 9

Common Equity Tier 1 capital: regulatory adjustments

Intangibles other than mortgage-servicing rights (net of related
tax liability) 799.26 791.88 828.85
Reciprocal cross-holdings in common equity 13.79 9.55 250.71
Total regulatory adjustments to Common equity Tier 1 813.05 801.44 1079.56
51,947.4 55,305.2 55,509.4
Common Equity Tier 1 capital 8 5 3

Additional Tier 1 capital: instruments

Directly issued qualifying Additional Tier 1 instruments plus
related stock surplus (share premium) 5000 5000 5000

56,947.4 60,305.2 60,509.4

Tier 1 capital 8 5 3

Tier 2 Capital-
It is a bank’s supplementary Capital. Undisclosed reserves, hybrid financial products, subordinated
term debts also known as junior debt securities. Tier 2 capital is less reliable than tier1 capital

(In millions )
Tier 2 Capital 19-20 20-21 21-22
Directly issued qualifying Tier 2 instruments plus related
stock surplus 10,400 9,800 9,200
Provisions 3,186.00 2,628.45 2,867.96
Tier 2 capital regulatory adjustments 13,586 12,428.45 12,067.96

Tier 2 Capital 13,586 12,428.45 12,067.96

Total Capital 70,755.15 72,733.70 72,577.38

 As we have seen the bank profit numbers have decreased over the years and there has been
a continuous increase in the Tier 1 Capital and continuous decrease in Tier 2 Capital. Total
capital that is the summation of Tier 1 and Tier 2 is gradually increasing.
 Major contributor to increase capital is Directly issued share capital, this will protect from
unexpected losses.
 SIB is prepared to face any adverse losses as they there is a continuous increase in the Tier 1
and the overall capital
 There have not been major changes in the constituents of capital though we can still see the
bank has reduced its share of retained earnings maybe because there is a continuous
decrease in profits.