I B AI B A Value of hybrid capital Hybrid capital provides operating and strategic flexibility for bank management in pursuing performance objectives
{"Image DocumentName": "Why do banks issue hybrid capital", "Image ImageDescription": "The cost of issuing HT I is typically much lower than the cost of equity on a pre-tax basis, and even lower on a post-tax basis, since there is no tax benefit associated with the cost of equity. Unlike Tier II, HT I can directly replace common equity to help offset such items as Goodwill. It has therefore been used extensively as an acquisition currency. The effect of adding HT I to a capital structure is to further lower the Weighted Average Cost of Regulatory Capital. The most cost-effective capital structure can be created using a barbell approach. Note: Illustrative cases based on indicative   LIBOR levels. 8.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}