AT A GLANCE: Summary Of UK Bank Stress Test Results

LONDON (Dow Jones)--European authorities Friday released the results of stress tests on the 91 major banks in the region. The test, carried out by the European Union's Committee of European Banking Supervisors, examined the balance sheets of the banks, their compliance with capital rules and how their exposure to the sovereign debt of 30 European countries would affect them in certain scenarios. CEBS tested the banks based on three scenarios. The first scenario measures capital levels at the end of 2011 assuming current official EU economic forecasts. A second scenario assumes a recession this year and next year, which CEBS estimates is a 5% probability. The third or worst-case scenario involves recessions this year and next year but made worse by an increase in sovereign risks, with long-term interest rates in the EU rising by a further 30 basis points on average. The probability of this happening is less than 5%, CEBS said. The success or failure depends upon a bank having a Tier 1 Capital Ratio of 6% or more under each scenario. The following is a bank-by-bank breakdown of the results in the U.K.: Barclays PLC (BCS) Tier 1 Capital Ratio Year End 2009 13% First Scenario (Benchmark): 15.8% Second Scenario (Adverse): 13.9% Third Scenario (Sovereign Shock): 13.7% HSBC Holdings PLC (HBC) Tier 1 Capital Ratio Year End 2009 10.8% First Scenario (Benchmark): 11.7% Second Scenario (Adverse): 10.4% Third Scenario (Sovereign Shock): 10.2% Royal Bank of Scotland PLC (RBS) Tier 1 Capital Ratio Year End 2009 14.4% First Scenario (Benchmark): 14.1% Second Scenario (Adverse): 11.7% Third Scenario (Sovereign Shock): 11.2% Lloyds Banking Group PLC (LYG) Tier 1 Capital Ratio Year End 2009 9.6% First Scenario (Benchmark): 10.8% Second Scenario (Adverse): 9.4% Third Scenario (Sovereign Shock): 9.2% (END) Dow Jones Newswires July 23, 2010 12:53 ET (16:53 GMT)