UK consumer, business confidence tumble amid concerns of a post-Brexit slowdown
The bank that nearly broke the United Kingdom is still in trouble eight years after the financial crisis.
Royal Bank of Scotland (RBS) was the worst performing major bank in stress tests performed by the Bank of England, despite a £45.5 billion ($56.8 billion) bailout by taxpayers in 2008.
“The stress test demonstrates that RBS remains susceptible to financial and economic stress,” the central bank said in a report published Wednesday.
RBS — which is still largely owned by the state — said it is issuing bonds to raise an additional £2 billion ($2.5 billion) to strengthen its balance sheet. Its shares dropped 4% on Wednesday.
Chief financial officer Ewen Stevenson said he was committed to “creating a stronger, simpler and safer bank.”
“We have taken further important steps in 2016 to enhance our capital strength, but we recognize that we have more to do to restore the bank’s stress resilience including resolving outstanding legacy issues,” he said.
Barclays (BCS) and Standard Chartered (SCBFF) also failed to meet some of the Bank of England’s standards.
This year’s version of the annual stress test was more demanding than previous editions. The finances of seven banks were tested on their ability to simultaneously withstand a severe recession, a crash in commodity prices and a financial crisis.
