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