UPDATE 2-Citi, UBS rank low in S&P new capital ratio study

* S&P says avg bank risk-adjusted capital ratio 6.7 pct

* S&P pegs Citi RAC at 2.1 pct, UBS at 2.2 pct

* Mizuho ranked lowest at 2 pct

* HSBC tops ranking with 9.2 pct; Goldman on 8.3 pct

* Says capital shortage remains a weakness for most banks

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LONDON, Nov 23 (Reuters) - Rating agency Standard & Poor's said it found most banks in a study were weakly capitalised, with Citigroup (C.N), UBS (UBSN.VX) and Mizuho Financial Group (8411.T) more than two-thirds below the average.

S&P released on Monday the first global comparison of risk-adjusted capital (RAC) adequacy for 45 top banks, aiming to more consistently capture risks in credit, trading, equity, operational and concentration.

"The results to date appear to confirm our view that capital is a rating weakness for a majority of banks in our sample," S&P said in its report.

S&P said the global average for its RAC ratio was 6.7 percent at the end of June, but Citigroup's RAC was 2.1 percent, UBS's was 2.2 percent and BBVA's was 5.4 percent, putting each in the bottom quintile. Japan's Mizuho Financial Group (8411.T) ranked lowest, with an estimated ratio of 2 percent.

Also ranking below average were Bank of America (BAC.N) on 5.8 percent; Deutsche Bank (DBKGn.DE) on 6.1 percent; Unicredit (CRDI.MI) on 6.3 percent and Wells Fargo (WFC.N) on 6.4 percent.

In contrast, HSBC's (HSBA.L) (0005.HK) RAC ratio was 9.2 percent, while Goldman Sachs (GS.N) and Toronto-Dominion Bank (TD.TO) each had a ratio of 8.3 percent. Morgan Stanley (MS.N) and Standard Chartered (STAN.L) also ranked in the top quintile, each with a ratio of 8.1 percent.

JPMorgan's (JPM.N) RAC ratio was estimated at 7 percent, just above Barclays (BARC.L) and Credit Suisse (CSGN.VX), both on 6.9 percent.

S&P said RAC ratios in its sample were lowest for Japanese banks and highest for banks in Canada and the Benelux countries.

Banks have improved their capital ratios since 2007 and are likely to continue to do so, S&P said.

"We currently expect banks to continue strengthening capital ratios over the next 18 months to comply with more stringent regulatory standards. Failure to achieve this could put renewed pressure on ratings," it said.

S&P in April launched its new capital ratio for banks to adjust for risk and provide a clearer assessment of balance sheet adequacy, which it said at the time could have "marginal rating implications".

Regulators around the world are attempting to reform or improve assessment of capital and S&P said its RAC ratio would be "globally consistent, more risk-sensitive than the leverage ratio and largely independent from banks' own risk assessment". [ID:nLL627270]

Using Tier 1 capital or leverage ratios to compare banks' relative capital positions can be misleading as the measures are not consistently calculated, S&P said. It used a stricter definition of capital and higher risk weights, especially for market risks, and said the use of hybrid capital and different accounting standards also distorted ratios. (Reporting by Steve Slater; Editing by David Holmes) ((steve.slater@reuters.com; +44 207 542 4367; Reuters Messaging: steve.slater.reuters.com@reuters.net))