Watchdog says UK banks must tackle capital shortfall

Suzie Neuwirth

UK BANKS and building societies need to address a capital shortfall of billions of pounds, the financial regulator said today.

Barclays, Co-operative Bank, Lloyds, Nationwide and RBS have a collective shortfall of £27.1bn, according to the Prudential Regulation Authority (PRA).

State-backed Lloyds, which the government signalled yesterday it plans to return to the private sector, has a £8.6bn shortfall.

“The vast majority of actions are due to be completed by end-2013, but the PRA has allowed some limited flexibility for a small part of these actions to be delivered during the first half of 2014,” said the city watchdog.

“The PRA will hold firms to these plans, and will require additional actions to be taken if capital to cover the full shortfalls is at risk of not being delivered by any firm.”