RBS has failed the Bank of England’s latest stress test which was based on the group’s balance sheet as at 31st December 2015.
The bank has responded saying that it has taken a number of actions since the end of last year, such as the run-down of Capital Resolution risk-weighted assets (reduced by £10.4 billion to £38.6 billion in the first nine months of 2016).
However, RBS has agreed a revised capital plan with the PRA to improve its stress resilience including the “reduction in certain non-core commercial portfolios in Commercial Banking”.
Commenting on the test results, Ewen Stevenson, RBS chief financial officer, said: “We have taken further important steps in 2016 to enhance our capital strength, but we recognise that we have more to do to restore the bank’s stress resilience including resolving outstanding legacy issues.”