EU software capital reversal to hit Lloyds, Barclays the most

Top UK banks boost CET1 ratios in Q3 as the PRA confirms capital benefit will end on January 1

Leading UK banks expect a negative impact on their solvency ratios of between 25 and 50 basis points as the European Union’s beneficial treatment on software intangibles is set to expire on January 1.

In July, the Prudential Regulation Authority (PRA) announced the removal of any deduction of software assets from UK banks’ Common Equity Tier 1 capital, with Lloyds and Barclays poised to feel the effect the most.

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The removal of the benefit is expected to drag Lloyds’ CET1 ratio down by

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