21/06/2013
British banks still running a deficit in tier 1 capital
P { margin-bottom: 0.08in; } Five major British banks as of the end of 2012 still had tier 1 equity needs of GBP27.1bn, or over EUR31bn, in order to reach a ratio of 7% of hard owners’ equity, the Bank of England (BoE) announced on 20 June, revising its initial estimate made in March this year upward by about GBP25bn. The five major banks are Barclays, Co-operative Bank, Lloyds Banking Group, Nationwide and RBS, the BoE says in a statement. At a time when banks have rolled out initiatives to strengthen their owners’ equity by GBP13.7bn, four of them (Barclays, Co-op, Lloyds Banking Group and RBS) will need to implement additional measures totalling GBP13.4bn to reach this level. The measures, which will include “sales and restructuring,” will mostly need to be initiated by the end of 2013, but some may begin in the first half of 2014. The eight largest banks in the country participated in the BoE survey, however, HSBC, Standard Chartered and Santander UK did not need to increase their owners’ equity as they were already above the 7% threshold.
