Santander UK notes the publication of the results of the 2017 stress tests conducted on seven major UK banks and building societies by the Bank of England.
As a result of the exercise, the Bank of England does not require Santander UK to undertake any actions.
Santander UK's lowest post-stress CRD IV end-point common equity tier 1 ('CET 1') capital ratio, over a five-year stress period to the end of 2021, was modelled to be 9.6% before management actions and 9.7% after allowed management actions. These results are significantly in excess of the CET 1 hurdle rate of 7.6% established by the Bank of England. Santander UK reported a CET 1 capital ratio of 12.1% as at 30 September 2017.
Once again, Santander UK had the lowest stressed CET1 ratio impact of all participating firms, demonstrating our resilient balance sheet and low risk profile.
The Bank of England’s CET1 hurdle rate comprises the CRR Pillar 1 minimum of 4.5% together with a Pillar 2a CET1 minimum of 3.1%. Santander UK expects that the Pillar 2a minimum will take effect on 1 January 2018.
Santander UK's lowest post-stress end-point leverage ratio, over a five-year stress period to the end of 2021, was modelled to be 3.3% before management actions and 3.3% after allowed management actions. These results are in excess of the leverage threshold of 3.25% established by the Bank of England. Santander UK reported a leverage ratio of 4.4% as at 30 September 2017, up from 4.1% as at 31 December 2016. As at 30 September 2017 the leverage exposure was £287.4bn.
Antonio Roman, Chief Financial Officer at Santander UK commented: "The PRA has examined extreme but plausible stress scenarios for the UK economy and has found, through their own analysis, that Santander UK has more than adequate capital to withstand such occurrences. We are pleased that our prudential regulator is comfortable with our capital plan and requires no actions from us.”
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Notes to Editors:
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its innovative products for retail customers and relationship banking model for UK SMEs. At 30 June 2017, the bank serves around 14 million active customers with c19,500 employees and operates through 826 branches (which includes 61 university branches) and 65 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful market share in 10 core countries in Europe and the Americas, and is among the world’s top banks by market capitalization. At the end of June 2017, Banco Santander had EUR 1.65 trillion in managed funds, 131 million customers, 13,800 branches and 200,000 employees. Banco Santander made attributable profit of EUR 3.6 billion in the first half of 2017, an increase of 24% compared to the same period last year.
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