Own funds Own funds are the sum of Tier 1 and Tier 2 capital. Tier 1 capi- tal consists of both Common Equity Tier 1 (CET1) and Addi- tional Tier 1 capital. CET1 capital is considered to be capital of the highest quality with ultimate loss-absorbance characteris- tics and consists predominately of paid-in capital and retained earnings. Profit may only be included after permis- sion from the financial supervisory authority and after deducting the proposed dividend. Additional Tier 1 and Tier 2 capital consist mostly of undated and dated subordinated loans, respectively. Holdings of other financial sector entities’ subordinated loans are deducted from the corresponding tier.