Response to 2025 BOE Capital Stress Test Results
Nationwide passes 2025 Bank of England capital stress test with comfortable margins above regulatory minimums.
- Minimum CET1 ratio under stress 14.5%
- Bank's minimum CET1 requirement 6.5%
- Minimum UK leverage ratio under stress 4.8%
- Regulatory leverage ratio requirement 3.25%
- House price fall in stress scenario 28%
- Peak unemployment rate in stress scenario 8.5%
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The Nationwide Group note the publication of the Bank of England's ("the Bank") 2025 Bank Capital Stress Test (BCST) results.
The hypothetical stress specified a fall in house prices of 28%; a peak in the unemployment rate of 8.5%; and a peak in Bank Base Rate of 8%. This is not a forecast of macroeconomic and financial conditions; rather it is intended to be a coherent 'tail risk' scenario designed to be severe and broad enough to support the Bank's assessment of the resilience of the UK banking sector to a range of adverse shocks.1
The Bank calculated the Group's minimum CET1 ratio as 14.5%, which reflected the continuation of distributions on all Tier 1 capital instruments and the application of strategic management actions. This is comfortably above the Bank's minimum requirement of 6.5%. The minimum UK leverage ratio was calculated as 4.8% after the application of strategic management actions, comfortably above the regulatory requirement of 3.25%.
The Bank has confirmed that the Group is not required to submit a revised capital plan or take additional actions as a result of this exercise.
The Group recognises the value of industry-wide stress testing and continues to support the financial stability objectives of the Bank and the Financial Policy Committee.
Further details on the results of BCST 2025 can be found on the Bank's website.
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.