RBS admits stress test data error
State-backed Royal Bank of Scotland suffered fresh embarrassment today after admitting it had got its sums wrong over a stress test by European regulators to see if lenders could withstand another major financial crisis.
Revised figures showed that instead of easily passing the test as initial results from the exercise showed, it had only just scraped through and was the worst performing of the British banks.
It comes just a day after RBS was fined £56 million by UK regulators over an IT meltdown in 2012 and a week after being hit with penalties of £399 million over its role in manipulating foreign exchange markets.
The error announced today by the bank related to a European Banking Authority exercise which required banks to meet a capital buffer threshold of at least 5.5% under a stress scenario.
RBS’s initial calculations initially resulted in a level of 6.7% being reported but it has now admitted that part of its modelling had been wrong and this should have been 5.7% – still passing the test but barely above the minimum.
It means the bank was behind fellow state-backed lender Lloyds, which had previously had the lowest figure at 6.2%. Barclays was at 7.1% and HSBC at 9.3%, the results showed.
The error related to a 4.2 billion euro (£3.5 billion) overstatement of its capital strength under the scenario. Shares fell nearly 1% after the disclosure this afternoon.
RBS is 80% owned by the taxpayer after being rescued during the financial crisis.
