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Stress test results reveal lender is still not recession-ready
Thursday 08 Dec 2016 Author: William Cain

Stress tests conducted by the Bank of England showed Royal Bank of Scotland (RBS) may require up to £4bn more capital in an economic downturn.

Cost-cutting and conversion of loss absorbing capital into equity, diluting existing shareholders, would reduce the capital deficit
to between £1bn to £1.8bn, according to analysts at UBS.

Failing the test means RBS must submit new capital plans to the central bank. No other banks were required to do this, though Barclays (BARC) and Standard Chartered (STAN) reported capital ratios below targets in the downturn scenario. (WC)

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