HSBC faces capital headwinds as regulatory changes kick in

Bank expects its CET1 capital ratio to fall 100–120bp through 2022, with regulation taking the heaviest toll

The reversal of European Union capital breaks and tougher UK risk-weight rules will shave between 60 and 80 basis points off HSBC’s Common Equity Tier 1 (CET1) capital ratio, the bank said.

HSBC forecast the Bank of England’s repeal of benign EU rules on capitalising software intangibles to lop 25bp off its core solvency in Q1 2022 – a heftier detriment than the benefit it was accruing when the BoE first announced its plan for a reversal.

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The bank also expects a further 35–55bp hit

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