Bank Valuations, On the UP perhaps?27 Mar 2024 18:40
BANK VALUATIONS
In the fourth quarter of last year, the major banks, such as NatWest, Lloyds, HSBC and Barclays had an overall core equity capital buffer of 14.7%, with an aggregate 3-month moving average liquidity coverage ratio of 147%, the BoE said.
However, the Bank will undertake a "desk based" stress test of lenders this year to check their resilience to shocks.
The FPC said it would maintain the countercyclical capital buffer - a rainy day reserve - for major UK banks at its "neutral" level of 2%.
Overall profitability of major banks is expected to remain robust but indicators of market value of their future profitability, such as average tangible price to book ratios, remain subdued, it said.
The FPC will publish further analysis of the ratios in June, echoing wider concerns in Europe at how valuations of banks lag those of U.S. rivals.