Wednesday, November 30, 2016

British banks: Royal Bank of Scotland failed in the stress test – business week

LondonIt was a new hurdle, which was built in the Bank of England in this year’s stress test. And it has brought major British banks to Stumble on their systemic importance. The overseers of the impact, the break-up of the Institute for the global financial system would take into account, and have complicated the examination of the load-carrying capacity significantly.

in The end, it was the quasi-nationalised Royal Bank of Scotland, which has done so hard, but other slats in the stress test scenario ripped. The have made the on Wednesday, the results presented clearly. The Bank, which is 73 percent owned by the state, must now raise at least two billion pounds (the equivalent of 2.35 billion euros) in additional capital.

Also, Barclays and Standard Chartered have revealed weaknesses in the stress test of the Bank of England, the claim was this Time much more than in the past two years. In the case of Barclays, the so-called systemic reference point, caused the Bank’s difficulties, it was. However, in this case, and also in the case of Standard Chartered, the previous plans of the money houses, sufficient in the opinion of the Supervisory authority, to strengthen the capital buffer to a sufficient extent.

The banks do not need to load in contrast to RBS, in order to meet the claims of the Bank of England. In the case of Barclays, the project, step by step from Africa to withdraw, and the business there to get rid of, should contribute to the improvement of the situation.

The Central Bank has also tested the resilience of the Lloyds Banking Group, HSBC, the British arm of the Spanish Santander Bank, as well as the real estate Bank Nationwide. These institutions have passed the Test.

All institutions had to have in the tested scenario, capital in the amount of 4.5 percent of their risk-weighted Assets and an additional capital buffer, the size of the specific risks. The scenario of the crisis saw a massive downturn in China and Hong Kong, a decline in global growth and a fall in British property prices by about a third in five years. The consequences of the UK leaving the EU, which is expected to come in 2019, were not part of the stress test, which was designed in the spring of this year.

RBS has more problems

The ailing RBS is also part of the stress test of the European banking authority Eba in the middle of this year, the major losers. The Bank is also fighting eight years after the outbreak of the financial crisis, with expensive Altsünden. As expected high penalty payments in a dispute to dubious US mortgage papers to come to the money house. The RBS has to sell their private clients division, Williams & Glyn.

This is a requirement by the EU for billions in state aid, with which the Institute was preserved in the crisis before the collapse. The Bank has presented on the night to Wednesday, the British Bank supervision with their revised plans to further raise capital. The RBS want to reduce, among other things, to a greater extent than in the past, non-performing loans and reduce their costs.

Britain’s banks have cut off this year in the stress test worse than expected. The benefits are worse down than predicted, said KPMG banking expert Steven Hall of the news Agency Bloomberg. Bernstein Analyst Chirantan Barua sees, especially in view of the massive weaknesses of the RBS currently no light at the end of the tunnel for the Bank. The Institute will remain a construction site and there for at least the next twelve months, there are no prospects that the RBS will pay dividends, writes Barua, in a study he published after the publication of the stress test results.


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