Leverage Ratio

The leverage ratio (LR) is a ratio of the bank's Common Equity Tier 1 capital (CET1) (the highest quality regulatory capital in terms of loss absorption) to risk exposure.

According to the requirements of Basel III, authorized institutions (AIs) need to comply with not only the risk-based capital adequacy ratio, but also the non-risk-based LR requirement as a “back-stop” to restrict the build-up of excessive leverage in the banking sector.

Minimum Leverage Ratio
Leverage ratio requirement applicable to all locally incorporated AIs Minimum 3%

Last revision date : 26 August 2019