The Prudential Regulation Authority has told UK banks to find another £13bn of capital in addition to the money already raised to strengthen their balance sheets.
The PRA’s latest report says there was a £27bn shortfall in the capital requirements of Royal Bank of Scotland, Lloyds Banking Group, Barclays, the Co-operative Bank and the Nationwide Building Society at the end of 2012.
It added that actions already planned by these groups would bring the shortfall down to £13bn.
HSBC, Santander UK and Standard Chartered did not need to raise any further capital at the end of 2012, the PRA says.
RBS had the biggest gap at the end of 2012, with the PRA reporting a £13.6bn capital shortfall. The measures already undertaken by the bank will reduce this to £3.2bn.
Lloyds had a £8.6bn shortfall at last year’s close and has only planned £1.6bn in capital actions, meaning it has to raise another £7bn. Barclays needs to find £1.7bn on top while Co-op needs £1.5bn. Nationwide has plugged its shortfall of just £400m.
“The PRA has asked firms to ensure that all plans to address shortfalls do not reduce lending to the real economy,” the regulator says.
“In line with the FPC recommendation, the PRA has accepted restructuring actions which, by reducing risk-weighted assets, will credibly deliver improvements in capital adequacy.”
Under Basel III guidelines, the banks need a risk-weighted capital ratio of at least 7 per cent.