Abstract:

Capital adequacy ratio determines the sustainable growth rate of bank assets.The latter refers to the growth rate of assets that can be supported by the internal and external sources of capital under the precondition that capital adequacy ratio remains unchanged.A bank's risk assets should increase in accordance with the increase of capital.It is an inherent requirement for a bank's liquidity, safety and profitability.Therefore, the bank management should fully realize in its management philosophy that the capital adequacy ratio is very important to the increase of bank assets, and correspondingly pursue an appropriate growth of the bank assets according to the management pattern that assets determine the issuance of loans.

Key words: sustainable growth, capital adequacy ratio, commercial bank, finance