HSBC nets $5 billion capital saving as PRA slims add-on
Pillar 2A requirement drops following PRA review
The UK regulator pared back HSBC's capital add-on in the third quarter, cutting its so-called Pillar 2A requirement to 2.9% of risk-weighted assets (RWAs) from the 3.5% set back in 2017.
Using RWA data from end-September, the revised add-on equates to $25 billion in capital. It would have been $30.2 billion if the 3.5% level still applied.
Of this $25 billion, 55%, or $13.8 billion, must be met by the highest quality, Common Equity Tier 1 (CET1) capital. Prior to the third quarter, 57% of the
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