KBRA Releases Research on Balance Sheet Leverage

NEW YORK--(BUSINESS WIRE)-- Kroll Bond Rating Agency (KBRA) announces the release of a new report, Measuring Balance Sheet Leverage: Banks Versus Industrials. This report is based on an analysis of the balance sheets of the 30 companies that make up the Dow Jones Industrial Average. It focuses on three key measures of balance sheet leverage, including equity-to-assets, debt-to-equity, and times interest expense coverage to demonstrate that the banking industry is far less leveraged than would appear compared to industrial companies. The banking industry may even be under-leveraged with ample capacity to issue corporate debt if the need arises. The report also discusses why adjustments of the ratio of equity-to-assets for goodwill, FDIC-insured deposits, and the reserve for loan losses would make for a fairer approach to assess the relative leverage of a bank and an industrial company.

Related Publications: (available at www.kbra.com)

• Measuring Balance Sheet Leverage: Banks Versus Industrials
• Bank Talk - The After Show: Just How Leveraged is Banking?
• KBRA Comments on the Proposed Community Bank Leverage Ratio (CBLR)

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190107006001/en/

Analytical:
Ethan Heisler, CFA, Senior Director
(516) 359-0975
[email protected]

Source: Kroll Bond Rating Agency

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