BoE stress tests: Lloyds just 10bp above minimum CET1 ratio
Bank’s simulated core ratio was just 10bp above requirements at the worst point of a severe recession
Lloyds Banking Group came within a hair’s breadth of failing the Bank of England (BoE)’s 2021 stress tests, coming out of the simulation with a Common Equity Tier 1 (CET1) ratio just 10 basis points above the reference rate – the sum of its capital and systemic buffer requirements.
The bank’s CET1 ratio, which stood at 16.2% at end-2020, was projected to hit a low of 7.8% by the second year of a severe recession as envisioned in the Solvency Stress Test (SST), after accounting for remedial
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