Nationwide Building Society Nationwide's Response to the Stress Test Results (8295I)
November 28 2018 - 1:02PM
UK Regulatory
TIDMNBS TIDM96MN
RNS Number : 8295I
Nationwide Building Society
28 November 2018
28 NOVEMBER 2018: NATIONWIDE'S RESPONSE TO THE RESULTS OF THE
BANK OF ENGLAND STRESS TEST 2018
Today the Bank of England issued the results of its latest
Concurrent Stress Test. The specified hypothetical Annual Cyclical
Scenario (ACS) was consistent with ACS 2017 with a 33% fall in
house prices and 9.5% peak in unemployment, and a rapid increase in
Bank Base Rate to 4% in the first year of the scenario.
Consistent with the results of ACS 2017, the results of the 2018
test confirm that Nationwide would remain profitable in such
conditions and continue to make full distributions on all Tier 1
capital instruments, with a minimum stressed CET1 ratio of 14.1%,
and a minimum UK leverage ratio of 5.1%, after the application of
management actions. In each case the Society remains substantially
above the regulatory hurdle rates set for this stress test of 7.9%
CET1 ratio and 3.6% UK leverage ratio, both before and after the
application of management actions.
The PRA has confirmed that Nationwide is not required to submit
a revised capital plan or take additional actions as a result of
this stress test exercise.
The CET1 ratio reduces primarily due to the impact of the
significant house price reduction, rising interest rate environment
and increase in unemployment rate on model risk weights, rather
than capital losses or the implementation of the IFRS 9 accounting
standard.
Nationwide recognises the value of industry-wide stress testing
and continues to support the financial stability objectives of the
Financial Policy Committee and the Bank of England.
On 22 November, Nationwide issued its interim results for the
period 5 April to 30 September 2018. These results reflected the
continued capital strengthening and security of our business with a
CET1 ratio of 31.7% (4 April 2018: 30.5%) and UK leverage ratio of
5.0% (4 April 2018: 4.9%).
Contacts:
Media Queries: Investor Queries:
Tanya Joseph Alex Wall
Tel: 020 7261 6503 Tel: 020 7261 6568
Mobile: 07826 922102 Mobile: 07917 093632
Tanya.joseph@nationwide.co.uk Alexander.wall@nationwide.co.uk
Sara Batchelor
Tel: 01793 657770
Mobile: 07785 344137
Sara.batchelor@nationwide.co.uk
-Ends-
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END
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