The test applied a hypothetical adverse scenario to the Group’s balance sheet as at 31 December 2017 and compared the theoretical Common Equity Tier 1 (“CET1”) ratio and Tier 1 leverage ratio positions of RBS before and after the impact of strategic management actions.
IFRS 9 Transitional basis
RBS's low point CET1 ratio under the hypothetical adverse scenario would have been 9.6% on a transitional basis pre management actions, excluding dividends and excluding CRD IV restrictions. This is above RBS’s 7.3% hurdle rate (please refer to definitions in notes below the table).
RBS’s Tier 1 leverage ratio under the hypothetical adverse scenario would have been 5.1% post the impact of strategic management actions. This is above the hurdle rate of 3.59%.
IFRS 9 Non-transitional basis (fully loaded)
RBS's low point CET1 ratio under the hypothetical adverse scenario would have been 9.2% on a fully loaded basis pre management actions, excluding dividends and excluding CRD IV restrictions. This is above RBS’s 6.9% hurdle rate (please refer to definitions in notes below the table).
RBS’s Tier 1 leverage ratio under the hypothetical adverse scenario would have been 4.8% on a fully loaded basis pre management actions, excluding dividends and excluding CRD IV restrictions. This is above the hurdle rate of 3.25%.
Commenting on the results, Katie Murray, Interim Chief Financial Officer, said:
“I am pleased that we have achieved a clear pass in the Bank of England’s stress test. This result provides confidence that RBS could continue to support its customers and the UK economy, even in the very tough economic conditions modelled in the test. It is a sign of further progress in rebuilding capital in a year when we also resolved our last major legacy issues as well as announcing an annual profit and paying a dividend for the first time in ten years.”
To download a full table of the RBS results click the button below.