Business
Nationwide's Response to the Stress Test Results
Nationwide's Response to the Stress Test Results.
About this update from Nationwide Building Society
[{"type":"text","content":"\n \nRNS Number : 8295I Nationwide Building Society 28 November 2018 \n\n28 NOVEMBER 2018: NATIONWIDE'S RESPONSE TO THE RESULTS OF THE BANK OF ENGLAND STRESS TEST 2018\n \nToday the Bank of England issued the results of its latest Concurrent Stress Test. The specified hypothetical Annual Cyclical Scenario (ACS) was consistent with ACS 2017 with a 33% fall in house prices and 9.5% peak in unemployment, and a rapid increase in Bank Base Rate to 4% in the first year of the scenario. \n \nConsistent with the results of ACS 2017, the results of the 2018 test confirm that Nationwide would remain profitable in such conditions and continue to make full distributions on all Tier 1 capital instruments, with a minimum stressed CET1 ratio of 14.1%, and a minimum UK leverage ratio of 5.1%, after the application of management actions. In each case the Society remains substantially above the regulatory hurdle rates set for this stress test of 7.9% CET1 ratio and 3.6% UK leverage ratio, both before and after the application of management actions.\n \nThe PRA has confirmed that Nationwide is not required to submit a revised capital plan or take additional actions as a result of this stress test exercise.\n \nThe CET1 ratio reduces primarily due to the impact of the significant house price reduction, rising interest rate environment and increase in unemployment rate on model risk weights, rather than capital losses or the implementation of the IFRS 9 accounting standard. \n \nNationwide recognises the value of industry-wide stress testing and continues to support the financial stability objectives of the Financial Policy Committee and the Bank of England.\n \nOn 22 November, Nationwide issued its interim results for the period 5 April to 30 September 2018. These results reflected the continued capital strengthening and security of our business with a CET1 ratio of 31.7% (4 April 2018: 30.5%) and UK leverage ratio of 5.0% (4 April 2018: 4.9%).\n \nContacts:\n\n\n\n\nMedia Queries:\nTanya Joseph\nTel: 020 7261 6503\nMobile: 07826 922102\[email protected]\n \n\n\nInvestor Queries:\nAlex Wall\nTel: 020 7261 6568\nMobile: 07917 093632\[email protected]\n \n\n\n\n\nSara Batchelor\nTel: 01793 657770\nMobile: 07785 344137\[email protected]\n \n\n\n&nbs...