3 Oct 2012 17:02
The Royal Bank of Scotland Group plc
Statement on the final assessment of the capital exercise and fulfilment of the European Banking Authority December Recommendation
The Royal Bank of Scotland Group plc ("RBS") notes the announcements made today by the European Banking Authority ("EBA") and the Financial Services Authority regarding the final assessment of the capital exercise and fulfilment of the EBA December 2011 Recommendation, which shows the following result for RBS.
RBS exceeds the 9% Core Tier 1 ratio including the sovereign buffer as stated in the EBA December 2011 recommendation.
A reconciliation between the exercise and RBS's published Core Tier 1 capital as at 30 June 2012 is provided below:
EBA Methodology | ||||
Published June 2012 | Material Holdings1 | Loss of tax on EL vs provisions2 | EBA methodology | |
Core Tier 1 capital, £m | 48,155 | (313) | (756) | 47,086 |
RWAs, £m | 434,681 | 0 | 0 | 434,681 |
Core Tier 1 ratio, % | 11.1% | 10.8% | ||
1 Material holdings deducted from Total Tier 1 in the published ratio, deducted from CT1 under EBA methodology.
2 Tax on the excess of expected loss over provisions - disallowed for CT1 under EBA methodology.
For further information, please contact:
Investor Relations
Richard O'Connor
Head of Investor Relations
+44 (0) 20 7672 1758
RBS Group Media Relations
+44 (0) 131 523 4205
Notes to Editors
The detailed results of the capital exercise as well as information on RBS exposures to central, regional and local governments in the EEA are available via the link below.
http://www.rns-pdf.londonstockexchange.com/rns/8703N_-2012-10-3.pdf
Background on the EBA capital exercise
The EBA Recommendation on the creation of temporary capital buffers to restore market confidence was adopted by the Board of Supervisors on 8 December 2011 to address the difficult situation in the EU banking system, especially with regard to the sovereign exposures, by restoring stability and confidence in the markets. The Recommendation was part of a suite of measures agreed at EU level.
The Recommendation called on National Authorities to require banks included in the sample to strengthen their capital positions by building up an exceptional and temporary buffer such that their Core Tier 1 capital ratio reaches a level of 9% by the end of June 2012. In addition, banks were required to hold an exceptional and temporary capital buffer against sovereign debt exposures to reflect market prices as at the end of September 2011. The amount of the sovereign capital buffer has not been revised.
The initial sample of the Capital Exercise included 71 banks. However, the 6 Greek banks were treated separately as the country is currently under an EU/IMF assistance programme. Moreover, four banks (Öesterreichische Volksbank AG, Dexia, WestLB AG and Bankia) from the original sample have been identified as undergoing a significant restructuring process, and are being monitored separately. Therefore, the final assessment published today refers to 61 banks.
ENDS