Banking News

UK banks post unexpectedly weak results in EU stress tests

UK banks post unexpectedly weak results in EU stress tests

(2 November 2018 – United Kingdom) Barclays and Lloyds Bank were among the worst performers in the European Banking Authority’s stress test, with a key capital measure dropping close to what investors consider the bare minimum needed to withstand a hypothetical economic crash.

Despite the poor performance, the results found that the region’s top 48 banks had enough capital to withstand the worst-case Brexit scenarios.

“In a surprise set of results, UK banks have fared worse than their European counterparts as IFRS9, combined with high levels of unsecured debt, took its toll on capital,” a banking partner at KPMG UK said.

“However, you have to consider that the UK was tested against a far more severe scenario than most other countries. In spite of the heavy losses, UK banks still withstood the incredibly tough test,” the KPMG partner continued.

The test is a snapshot of balance sheets at the end of 2017 and therefore does not take into account any actions taken by the banks since then to shore up their capital.

Comment on this article

 

Your comments will not be published. Required fields are marked *

 

Please enter the word you see in the image below: