Regulator Identifies £13.6bn Capital Shortfall at Royal Bank of Scotland
LONDON -- The shares of Royal Bank of Scotland slid 1 pence to 318 pence during early trade this morning after the Prudential Regulatory Authority said it had identified a £13.6 billion capital shortfall at the bank.
The PRA, which was established this year to regulate the bank sector and is part of the Bank of England, assessed eight major U.K. banks and building societies to ensure they held capital resources representing at least 7% of their risk-weighted assets by the end of 2013.
As at the end of 2012, the PRA calculated risk-weighted assets and capital resources at RBS were £624 billion and £30 billion respectively, giving a ratio of 4.8%.
The PRA acknowledged the bank's existing plans would produce extra capital of £10 billion this year, leaving a further £3 billion to be generated.
RBS said this morning that, based on its own projections, just an additional £0.4 billion was required over and above its 2013 capital plans. The FTSE 100 member claimed this £0.4 billion would be produced during early 2014.
Other organisations named by the PRA today as carrying a shortfall were Barclays, Co-operative Bank, Lloyds Banking Group, and Nationwide, with their combined deficit coming in at £27 billion.
HSBC, Standard Chartered and the U.K. arm of Santander were all deemed to have met the PRA's 7% capital measure.
Of course, whether today's update from the PRA as well as the wider prospects for the banking sector still combine to make RBS shares a buy is something only you can decide.
However, if you currently own RBS shares and are looking for bargains outside of the banking sector, this special market research divulges five particularly attractive possibilities.
Indeed, all five opportunities offer a rich mix of robust prospects, illustrious histories and dependable dividends, and have just been declared by the Fool as "5 Blue Chips You Can Retire On"!
Just click here for your report -- it's free.
The article Regulator Identifies £13.6bn Capital Shortfall at Royal Bank of Scotland originally appeared on Fool.com.Maynard does not own any share mentioned in this article. The Motley Fool owns shares in Standard Chartered. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.