Standard Chartered PLC SCPLC statement on BoE 2016 stress test results (5139Q)
November 30 2016 - 2:05AM
UK Regulatory
TIDMSTAN
RNS Number : 5139Q
Standard Chartered PLC
30 November 2016
30 November 2016
Standard Chartered PLC statement on the Bank of England 2016
stress test results
Standard Chartered PLC (the "Group") along with certain other UK
based financial institutions has been subject to the 2016 stress
test (the "Stress Test") conducted by the Bank of England ("BoE").
The Stress Test is designed to assess the capital adequacy of the
UK banking system based on the banks' balance sheets as at 31
December 2015.
The scenario for the Stress Test was severe for the Group's
business operations as it includes a synchronised global downturn
with particularly severe impact on Asia, as well as a generalised
downturn in emerging market economies. This scenario was applied to
the Group's balance sheet as at 31 December 2015 and compared the
theoretical Common Equity Tier 1 capital ("CET1 Capital") ratio and
Tier 1 leverage ("Leverage") ratio low point positions of the Group
before and after the impact of strategic management actions.
Stress Test results
The results of the Stress Test announced by the BoE this morning
showed that the Group met both the CET1 Capital ratio and the
Leverage ratio requirements after the impact of strategic
management actions.
The Stress Test resulted in a hypothetical low point CET1
Capital ratio for the Group of 7.2 per cent after the impact of all
strategic management actions and conversion of Additional Tier 1
("AT1") capital compared to the CET1 Capital ratio hurdle rate of
6.1 per cent.
The Group had a hypothetical low point Leverage ratio of 4.3 per
cent in the Stress Test scenario after the impact of all strategic
management actions compared to the Leverage ratio hurdle rate of
3.0 per cent.
The Prudential Regulation Authority Board concluded that the
Group did not meet its Tier 1 risk-weighted capital requirement
including Pillar 2A but determined that in light of the steps the
Group has subsequently taken to strengthen its capital position it
does not require it to submit a revised capital plan.
Since 31 December 2015 these actions include:
-- The Group's CET1 Capital ratio has improved 40bps to 13.0 per
cent as at 30 September 2016, at the top of its 12-13 per cent
target range
-- The Group issued $2 billion AT1 capital in August 2016 that,
together with the increase in CET1 Capital in the period, resulted
in its Tier 1 capital ratio improving around 90bps to 15.0 per cent
at the end of the third quarter
-- Progress reducing the Group's liquidation portfolio and other
restructuring actions are expected to add around 50bps to its CET1
Capital and Tier 1 capital ratios in the fourth quarter of 2016
The Group has a strong and liquid balance sheet and the results
of the Stress Test demonstrate its resilience to a severe global
stress scenario.
Additional information
Minimum Minimum
stressed stressed
ratio ratio
before after
the impact the impact
of strategic of strategic
management management
Actual actions actions Systemic Actual
(end or AT1 and conversion Hurdle reference (2016
2015) conversion of AT1 rate point Q3)
--------------------- ------- -------------- ---------------- ------- ----------- -------
CET1 Capital
ratio (%) 12.6 5.5 7.2 6.1 6.6 13.0
Tier 1 capital
ratio (%) 14.1 6.3 7.7 15.0
Total capital
ratio (%) 19.5 9.4 11.0 20.5
Memo: risk-weighted
assets ($bn) 303 390 371 292
Memo: CET1
($bn) 38 21 27 38
--------------------- ------- -------------- ---------------- ------- ----------- -------
Tier 1 leverage
ratio (%) 5.5 4.0 4.3 3.0 3.1 5.6
Memo: leverage
exposure
($bn) 729 607 591 745
--------------------- ------- -------------- ---------------- ------- ----------- -------
1. Further information on the Group's financial performance will
be available on 24 February 2017 when its 2016 annual results are
published. The Group's 2015 annual results are at
https://www.sc.com/annual-report/2015/
2. The Stress Test scenario incorporated a synchronised global
downturn in output growth, which included particularly adverse
effects on growth in China and Hong Kong. Details of the BoE's
approach to the Stress Test and the detailed results in relation to
all participating banks are available from the BoE website:
http://www.bankofengland.co.uk/financialstability/Pages/fpc/stresstest.aspx
3. The stress scenarios incorporated in the Stress Test are not
forecasts. Rather, they are 'tail-risk' scenarios designed to be
severe and broad enough to assess the resilience of UK banks to
adverse shocks
4. The projections of the Group's financial performance under
the hypothetical stress scenario included in this announcement are
based on the methodology and calculations of the BoE. These do not
represent the Group's projections, or base capital plan
assumptions
For further information, please contact:
Mark Stride
Global Head, Investor Relations
+44 (0)20 7885 8596
mark.stride@sc.com
Simon Kutner
Executive Director, Group Media Relations
+44 (0) 20 7885 8696
Simon.kutner@sc.com
Note to Editors
Standard Chartered
We are a leading international banking group, with around 84,000
employees and a 150-year history in some of the world's most
dynamic markets. We bank the people and companies driving
investment, trade and the creation of wealth across Asia, Africa
and the Middle East. Our heritage and values are expressed in our
brand promise, Here for good.
Standard Chartered PLC is listed on the London and Hong Kong
Stock Exchanges as well as the Bombay and National Stock Exchanges
in India.
For more information please visit www.sc.com. Explore our
insights and comment on our blog, BeyondBorders. Follow Standard
Chartered on Twitter, LinkedIn and Facebook.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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November 30, 2016 02:05 ET (07:05 GMT)
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