By Max Colchester and David Enrich
LONDON-- Royal Bank of Scotland Group PLC on Friday admitted
there were errors in the data it submitted to last month's European
stress tests, the latest mishap to hit an exercise aimed at
rebuilding confidence in Europe's banks.
RBS, which is 80% owned by the U.K. government, said it had
overstated the amount of top-quality capital it held. The
adjustment wiped around EUR5 billion ($6.27 billion) of capital
from the bank's balance sheet meaning it only just passed the
stress test.
"We are examining how this mistake was made, and will be working
with our regulators as we do so," said an RBS spokeswoman.
The error is the latest in a string of data problems that have
hit the test, which was orchestrated by the European Banking
Authority as a way of rebuilding trust in the embattled European
banking sector.
Soon after the test results were published European Central Bank
officials found an error in the 2013 capital ratio of Italy's Banca
Monte dei Paschi di Siena SpA. The ECB and EBA also published
different numbers for Deutsche Bank AG's litigation costs.
The Bank of England notified the EBA about the latest mistake on
Friday, after RBS previously notified the Bank of England. "The
error is being rectified as soon as it was detected," an EBA
spokeswoman said, adding that she isn't aware of any other banks
having made similar errors.
The RBS error stemmed from the way it accounted for the tax
relief it gets from previous losses. This meant RBS artificially
boosted its capital base. When applied to the "stressed scenario"
of the EBA's test it meant RBS's capital ratio 5.7% compared with
the 6.7% previously reported. The pass rate for the test was
5.5%.
Write to Max Colchester at max.colchester@wsj.com and David
Enrich at david.enrich@wsj.com
Access Investor Kit for Royal Bank of Scotland Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B7T77214
Access Investor Kit for Banca Monte dei Paschi di Siena SpA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=IT0004984842
Access Investor Kit for Royal Bank of Scotland Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US7800976893
Subscribe to WSJ: http://online.wsj.com?mod=djnwires