RBS boasts ‘plentiful’ funds to meet capital requirements

N.R. | ShareCast | 22 May, 2013 11:38 - Updated: 12:26 | | |

RBS

The Royal Bank of Scotland Group said newly enforced capital requirements could be met by its current business plans, with ‘plentiful surplus funding’ available.

The bank, in which the state owns an 81% stake, was today informed by the Bank of England’s Prudential Regulatory Authority of its new required capital ratios, after an investigation in March found UK banks had a combined capital shortfall of around £25bn.

RBS confirmed its confidence in improving its Core Tier 1 capital ratio and its ability to meet the new capital requirement through continued delivery of its recently updated business plan.

Chief Executive Officer Stephen Hester said the board was pleased with RBS's “progress and momentum” towards completing its return to full financial health.

“Our balance sheet has been transformed and our core business has plentiful surplus funding to support continued growth in lending."

The bank said it remained committed to “a prudent approach to capital”.

Earlier in the month, RBS unveiled its annual and first-quarter results where it informed of its progress towards a fully loaded Basell III core tier-one capital ratio of around 9.0% by the end of the year, with a 50 basis points improvement to 8.2% in the first quarter.

At that time RBS outlined the key elements of its new business plan, including reductions in the size of its Markets business and Non-Core assets, as well as the plans for a partial IPO of its US subsidiary Citizens Financial.

On Wednesday the bank reiterated that “some” of the actions in its business plan “extend beyond year end 2013”.

RBS restated that the plan also contained provision for lending expansion in its core UK Divisions but “does not call for issuance of contingent capital instruments, though this remains an option open to the group”.

The Bank of England’s Financial Policy Committee (FPC), which is tasked with monitoring macroeconomic risks, in March applied potential tougher measures of risk, fines and losses to UK bank balance sheets and judged that banks needed to take further action to bolster their capital ratios.

The FPC called for the banks to achieve a common equity tier 1 capital ratio, based on Basel III definitions and after the required adjustments, of at least 7% of risk-weighted assets by end 2013.

Shares in Royal Bank of Scotland Group were up 1.7% to 347.9p at 12:10 on Wednesday.

OH

More news

11:55 NHS unveils drastic overhaul proposals in Five Year Forward View report

The NHS has laid out radical new proposals as it unveiled for the first time a clear plan on how it intends to close the £30bn funding gap expected to open up by 2020.

11:50 Inchcape reports 'strong' third quarter performance, despite currency headwinds

Automotive retail and services company Inchcape reported a strong third quarter performance, with revenue up 10.6% year-on-year at £1.697bn at constant currency.

11:49 Support and resistance levels for the main currency pairs

The following are the technical support and resistance levels for Forex trading.

11:47 Foxtons still a 'buy' despite profit warning, says Numis

Investors of Foxtons shouldn't be deterred by a profit warning from the estate agency group, says Numis Securities, which maintained its 'buy' rating after a sell-off in the shares on Thursday.

10:33 Thursday broker round-up UPDATE

Abcam: FinnCap moves target price from 390p to 400p keeping a hold recommendation.

10:05 UK mortgage approvals drop to 14-month low in September, says BBA

UK home loan approvals sank for the third month in a row to a 14-month low in September, according to data out on Thursday.

10:17 Tesco results live

Welcome to our rolling coverage of Tesco's results this morning:

09:44 London open: Tesco leads UK stocks lower as first-half profits drop

UK stocks fell sharply on Thursday morning, led by poorly-received updates from blue chips Tesco, Tullow Oil and Unilever and a profit warning from Foxtons.

08:25 Europe open: Stocks recover after initial stumble

An hour after the open European equities were to be seen paring an initial drop on the heels of a better than expected reading on German and Eurozone manufacturing which helped to compensate for weak French data.

08:25 Smartphone giant will move customer data outside China, citing 'privacy standards'

Chinese smartphone competitor Xiaomi revealed on Thursday that it will move some data on its non-Chinese customers away from its Beijing servers.

Advertising

HIGHLIGHTS

MPC minutes emphasise lack of inflationary pressures

As anticipated , Carney maintained his majority of 7-2 in favour of steady policy.

VIDEOS

EUR/USD: continues its clearly bearish trend
REGISTER NOW!