Banks near to closing £25bn capital hole

Tim Wallace
Follow Tim
BRITAIN’S biggest lenders have slashed the size of their capital hole in the last six months, the Bank of England’s prudential regulatory authority (PRA) is expected to announce today.

Bank governor Lord King last night revealed the hole stood at around £25bn earlier this year, with RBS and Lloyds accounting for most of that gap.

However both banks have had their plans to fill the gaps approved by the new regulator.

RBS improved its core tier one capital levels by around £2.5bn in the first quarter alone, and is believed to be on track to fill the gap by the end of 2013.

And Lloyds has been closing the gap with sales of its overseas private banking units, its Spanish operations, its US mortgage book and asset manager St James’ Place. As a result it is thought to have closed three-quarters of the gap.

Meanwhile the Co-op Bank revealed its plans to fill its £1.5bn hole this week, including a bail in of some of its junior bondholders. Barclays’ hole is expected to be negligible now, while the other lenders like HSBC had no shortfall.