It was found that RBS did not meet its common equity Tier 1 (CET1) capital or Tier 1 leverage hurdle rates before additional Tier 1 (AT1) conversion in the scenario, and after AT1 conversion, it did not meet its CET1 systemic reference point or Tier 1 leverage ratio hurdle rate. The bank has since agreed a revised capital plan with the PRA.
Ewen Stevenson, chief financial officer at RBS, said: “We are committed to creating a stronger, simpler and safer bank for our customers and shareholders. We have taken further important steps in 2016 to enhance our capital strength, but we recognise that we have more to do to restore the bank’s stress resilience, including resolving outstanding legacy issues.”
Barclays failed to meet its CET1 systematic reference point prior to additional Tier 1 conversion. Meanwhile, Standard Chartered, which did meet all of its hurdle rates and systematic reference points, was found not to have met its Tier 1 minimum capital requirement.
However, the PRA did not require either Barclays or Standard Chartered to submit a revised capital plan in light of steps that they had already taken to strengthen their position. HSBC, Lloyds Banking Group, Santander UK and Nationwide Building Society were also included in the test.