RBS, Barclays and Standard Chartered Stumble in Stress Test
November 30 2016 - 3:40AM
Dow Jones News
LONDON—Royal Bank of Scotland Group, Barclays and Standard
Chartered all stumbled in a Bank of England stress test Wednesday,
but only largely state-owned RBS must take fast action to bolster
its capital.
RBS must add $2.5 billion in capital after failing the test.
The central bank said the U.K. banking system is strong enough
to keep lending to homes and businesses even if the global economy
were to become turbulent, in tests that measured how seven major
lenders could cope with economic growth contracting to financial
crisis levels, property prices plummeting and oil bottoming out at
$20 a barrel.
The Bank of England said that RBS needed to thicken its capital
cushion to withstand a severe economic shock. The
73%-government-owned bank will outline a new strategic plan early
next year as it continues to face headwinds from low interest rates
and potentially vast fines. On Wednesday the bank said that it
would further cut costs and assets to meet regulatory standards.
The Bank of England must still sign off on the plan.
Standard Chartered and Barclays also missed certain hurdles
under the stress scenarios, but neither bank will need to change
its capital plans.
The annual tests measure the resilience of seven lenders—Royal
Bank of Scotland Group PLC, Lloyds Banking Group PLC, Barclays PLC,
Standard Chartered PLC, HSBC Holdings PLC, Santander U.K. and
Nationwide Building Society—in different scenarios that could erode
their capital.
Write to Margot Patrick at margot.patrick@wsj.com and Max
Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
November 30, 2016 03:25 ET (08:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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