Audit results: RBS admits mistake in numbers

The state-owned RBS narrowly scrapes through and is the weakest performer among Britain’s banks

LONDON: The Royal Bank of Scotland has accepted that it got its sums wrong over the European Banking Authority stress tests last month. Revised figures revealed showed that instead of passing the test easily as initial results from the exercise showed, the state-owned RBS had narrowly scraped through and was the weakest performer among Britain’s banks. The crunch audit was aimed at preventing a repeat of the crisis that nearly led to the euro’s collapse. The stress tests ran the banks through two different economic scenarios to see whether their balance sheets were healthy enough to withstand further economic shocks. Under a baseline scenario, a bank’s core capital ratio, a measurement of financial strength, must not fall below 8%. In the adverse scenario, it must not fall below 5.5%. RBS’s initial calculations initially resulted in a level of 6.7% being reported.

Published in The Express Tribune, November 23^rd, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.