TCE (tangible common equity)/RWA (risk-weighted assets)

TCE/RWA Ratio is most commonly used to evaluate the capital strength of a bank. This parameter particularly helps investors and rating agencies to assess the value of a banking institution’s core capital position minus intangibles and non-controlling interest. TCE equals shareholders equity (Total Equity Capital) minus intangible assets, preferred shares, and non-controlling (minority) interest in subsidiaries. RWA is total assets weighted by the credit risk of specific counter parties.