Rising pass mark proves tough for banks

Rising pass mark proves tough for banks

Average CET1 ratios fell 5% and average leverage ratios fell by 1.3% before management actions.

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Commenting on the Bank of England stress test results, Steven Hall, Banking Partner, KPMG says:

“Today’s performance is worse than predicted, this is the highest average fall in CET1 and leverage ratios we’ve seen in the history of a UK concurrent stress test. Average CET1 ratios fell 5% and average leverage ratios fell by 1.3% before management actions. All banks started this test in a better place than they have previously but this year’s test is the most severe we’ve seen. As predicted misconduct costs have weighed heavy on results.

“Under this hypothetical stress shareholders and AT1 holders have suffered as a result of reduced dividend payments. Holders of hybrid convertible securities also suffer through the conversion of common equity capital.”

-Ends-

For further information please contact:

Christina Bridge, KPMG Corporate Communications

M: 07789 504905

E: Christina.Bridge@kpmg.co.uk

KPMG Press office

T: +44 (0) 207 694 8773

 

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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