Goldman Sachs 2015 Annual Report Download - page 201

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
As of December 2015, similar to the firm, GS Bank USA is
required to calculate each of the CET1, Tier 1 capital and
Total capital ratios in accordance with both the
Standardized Capital Rules and Basel III Advanced Rules.
The lower of each ratio calculated in accordance with the
Standardized Capital Rules and Basel III Advanced Rules is
the ratio against which GS Bank USA’s compliance with its
minimum ratio requirements is assessed. Each of the ratios
calculated in accordance with the Standardized Capital
Rules was lower than that calculated in accordance with the
Basel III Advanced Rules and therefore the Standardized
Capital ratios were the ratios that applied to GS Bank USA
as of December 2015. The capital ratios that apply to GS
Bank USA can change in future reporting periods as a result
of these regulatory requirements.
As of December 2014, GS Bank USA was required to
calculate each of the CET1, Tier 1 capital and Total capital
ratios in accordance with both the Basel III Advanced Rules
and Hybrid Capital Rules. The lower of each ratio
calculated in accordance with the Basel III Advanced Rules
and the Hybrid Capital Rules was the ratio against which
GS Bank USA’s compliance with its minimum ratio
requirements was assessed. Each of the ratios calculated in
accordance with the Hybrid Capital Rules was lower than
that calculated in accordance with the Basel III Advanced
Rules and therefore the Hybrid Capital ratios were the
ratios that applied to GS Bank USA as of December 2014.
The table below presents the ratios for GS Bank USA
calculated in accordance with both the Standardized and
Basel III Advanced rules as of both December 2015 and
December 2014, and with the Hybrid Capital Rules as of
December 2014. While the ratios calculated in accordance
with the Standardized Capital Rules were not applicable
until January 2015, the December 2014 ratios are presented
in the table below for comparative purposes.
As of December
$ in millions 2015 2014
Standardized
Common Equity Tier 1 $ 23,017 $ 21,293
Tier 1 capital 23,017 21,293
Tier 2 capital 2,311 2,182
Total capital $ 25,328 $ 23,475
RWAs $202,197 $200,605
CET1 ratio 11.4% 10.6%
Tier 1 capital ratio 11.4% 10.6%
Total capital ratio 12.5% 11.7%
Basel III Advanced
Common Equity Tier 1 $ 23,017 $ 21,293
Tier 1 capital 23,017 21,293
Standardized Tier 2 capital 2,311 2,182
Allowance for losses on loans and
lending commitments (311) (182)
Tier 2 capital 2,000 2,000
Total capital $ 25,017 $ 23,293
RWAs $131,059 $141,978
CET1 ratio 17.6% 15.0%
Tier 1 capital ratio 17.6% 15.0%
Total capital ratio 19.1% 16.4%
Hybrid
RWAs N/A $149,963
CET1 ratio N/A 14.2%
Tier 1 capital ratio N/A 14.2%
Total capital ratio N/A 15.7%
Tier 1 leverage ratio 16.4% 17.3%
The firm’s principal non-U.S. bank subsidiary, GSIB, is a
wholly-owned credit institution, regulated by the
Prudential Regulation Authority (PRA) and the Financial
Conduct Authority (FCA) and is subject to minimum
capital requirements. As of December 2015 and
December 2014, GSIB was in compliance with all
regulatory capital requirements.
Goldman Sachs 2015 Form 10-K 189