External minimum requirements for own funds and eligible liabilities (MRELs) – 2025

Our approach to MREL disclosure

This information is structured as follows:

• Explanation of approach to disclosure;
• Firm-specific information for a bail-in preferred resolution strategy; and
• Firm-specific information for a partial transfer preferred resolution strategy.

Explanation of approach to disclosure

1. The MRELs set out in this disclosure apply as at 1 January 2025 unless otherwise stated. MRELs have been set on the basis of the current MREL statement of policy (SoP).^{footnote [1]}

2. This publication contains the 2025 external MRELs for all firms with a resolution entity incorporated in the UK for which an MREL above MCR has been communicated. Individual external MRELs are based on balance sheet data as at 31 December 2024 and MCRs as at 8 April 2025.^{footnote [2]} Any subsequent changes to balance sheet data and MCRs are not reflected in this disclosure and may affect a firm’s MREL as set out in Table A.

3. For firms whose binding MCR is based on risk-weighted assets (RWAs), the table contains each firm's Pillar 1 and Pillar 2A requirements expressed as a percentage of the firm's RWAs. For firms with a leverage-based binding MCR, Table A contains each firm's requirement expressed as a percentage of the total value of the firm’s leverage exposures (LEs). This is based on the current definition of the ‘total exposure measure’ as set out in the Leverage Ratio (CRR) Part of the PRA Rulebook.^{footnote [3]} MRELs expressed as a percentage of LEs are given to the nearest 0.05% to align the number of decimal places with the leverage-based binding MCR. In the context of these paragraphs, a ‘binding’ capital requirement means the requirement which requires the greatest quantum of total capital resources at a given point in time. More than one capital requirement may be legally binding at one time. In addition to the requirements set out in the SoP, UK resolution entities of global systemically important banks (G-SIBs) are subject to separate requirements set by the retained EU law version of Regulation 575/2013/EU (CRR), relating to total loss-absorbing capacity (TLAC).^{footnote [4]}

4. The buffers included in Table A comprise:

a. A capital conservation buffer of 2.5%;

b. Financial Stability Board (FSB) G-SIB buffers, based on the FSB’s 2024 list of G-SIBs^{footnote [5]};

c. The other systemically important institutions (O-SII) buffer, in line with the PRA’s current^{footnote [6]} published approach^{footnote [7]} and rates.^{footnote [8]} The UK countercyclical capital buffer (CCyB) rate is assumed to be 2%, as applicable at 9 April 2025.^{footnote [9]} In all other jurisdictions the CCyB rate is assumed to be 0% (in practice positive rates do apply currently in some jurisdictions).

The buffers in Table A do not include any PRA buffers, the size of which is firm-specific and confidential. The calculation of firms’ combined buffers above MREL is in line with PRA supervisory statement 16/16,^{footnote [10]} where relevant.

5. The Bank sets the MRELs that will apply to individual firms on an annual basis for the year ahead, based on the latest available regulatory data on each firm. The MREL set for a specific firm in any given year will ultimately depend on a number of factors including, but not limited to:

a. changes to the firm and its balance sheet, including changes to its regulatory capital requirements and RWAs;

b. the Bank’s preferred resolution strategy for the firm (which the Bank must review annually);

c. an assessment of the concerns regarding the resolvability of the firm, including the progress of the firm in achieving resolvability;

d. where applicable, discussions within international crisis-management groups; and

e. any future changes in Bank, PRA or international policy, or in the applicable legal regime, which change the way MREL or capital requirements are calculated.

Bail-in preferred resolution strategy

6. The firms that must meet MREL on the basis of a bail-in resolution strategy are: Barclays, Coventry Building Society, HSBC (Group, and European Resolution Group), Leeds Building Society, Lloyds Banking Group, Metro Bank, Nationwide Building Society, NatWest Group, OSB Group, Santander UK, Skipton Building Society, Standard Chartered and Yorkshire Building Society.

7. Virgin Money UK and The Co-operative Bank are no longer included in Table A. This reflects Nationwide Building Society’s acquisition of Virgin Money UK on 1 October 2024 and Coventry Building Society’s acquisition of The Co-operative Bank on 1 January 2025. The balance sheet for Nationwide Building Society is as at 31 December 2024, consistent with the general approach described in paragraph 2. The balance sheet for Coventry Building Society is as at 1 January 2025 in order to reflect the acquisition.

8. Table A shows the binding external MRELs that are currently in effect for these firms, except for OSB Group. The requirement shown in Table A for OSB Group is the interim external MREL that has applied from 13 July 2024. OSB Group’s end-state external MREL applies from 13 July 2026.

9. UK resolution entities that are G-SIBs, other than HSBC Group (for which see paragraph 10 below), are required to maintain end-state external MRELs equivalent to the higher of (on a consolidated basis):

i. 2x(Pillar 1 plus Pillar 2A); or

ii. the higher of two times the applicable leverage ratio requirement or 6.75% of LEs (in line with the FSB’s TLAC standard), G-SIB entities are also subject in parallel to the requirements for TLAC set out in CRR which will be binding if higher in any case; that is, the higher of 18% of RWAs or 6.75% of LEs.

10. The preferred resolution strategy for HSBC Group is a multiple point of entry bail-in strategy. The end-state external MRELs given above that apply to the European Resolution Group (HSBC Holdings plc, HSBC Bank UK plc, HSBC Bank plc and their subsidiaries) will contribute towards meeting HSBC’s Group requirement, in line with the FSB’s TLAC standard for G-SIBs. The HSBC Group requirement reflects the higher of: (i) 18% of RWAs on a consolidated basis; (ii) 6.75% of LEs on a consolidated basis; and (iii) the sum of requirements relating to other group entities or sub-groups. The end-state ‘sum of parts’ figures for (iii) are estimates based on current information about requirements that would apply to other group entities or subgroups in other jurisdictions. HSBC European Resolution Group is not itself subject to an MCR and the binding MCR shown in Table A is calculated for the purpose of determining an MREL requirement for the HSBC European Resolution Group. It is shown for illustrative purposes only.

Transfer preferred resolution strategy

11. The firms that must meet MREL on the basis of a transfer resolution strategy (‘transfer firms’) are Monzo Bank and Starling Bank. Table A shows the interim external MRELs which currently apply to these firms.

Changes to end-state MREL deadlines

12. The Bank has made firm-specific adjustments to the indicative end-state external MREL for transfer firms that have commenced but not concluded their transition to an end-state MREL. End-state MREL deadlines have been extended for Monzo Bank and Starling Bank pending the conclusion and implementation of the Bank's revised MREL policy. Further detail is set out in the paragraph below. This replaces binding end-state MREL compliance dates falling before that date that the Bank had previously communicated. Interim MRELs that have been previously communicated remain unchanged and are set out in paragraphs 14 to 16 and Table A.

13. The extension of the end-state deadline has been made in light of the Bank’s proposals set out in the MREL consultation paper (CP).^{footnote [11]} The Bank proposed in the consultation that it would generally expect to set transfer firms’ MRELs equal to MCRs and proposed an implementation date of 1 January 2026. The Bank is considering feedback to this consultation before finalising its revised policy. As noted in the MREL CP, the proposal is also dependent upon the passage of the Bank Resolution (Recapitalisation) Bill, and to targeted amendments to secondary legislation which would be necessary to support it, and which HMT has committed to exploring and engaging on separately with industry.

Calibration of MREL

14. For transfer firms, as noted in paragraph 4.8 of the MREL SoP, the Bank may choose to adjust a firm’s MREL downwards from the full amount that would be required for a bail-in resolution strategy. The quantum of MREL may be adjusted to reflect the fact that, in a partial transfer resolution, less than the entire balance sheet of the institution may need to be recapitalised at the point of resolution. This is a firm-specific judgement balancing a number of factors.

15. The Bank has determined indicative end-state external MRELs for each firm of 1.3 times their binding MCR. Interim external MRELs take the revised indicative end-state MREL into account and are reflected in Table A. These are the lower of 18% RWAs or 1.15 times the binding MCR, but not less than the binding MCR.

16. The Bank’s firm-specific judgements are based on these firms’ current preferred resolution strategy and balance sheets. The Bank takes into account its policy set out in paragraph 4.8 of the MREL SoP; the need to ensure firms can be resolved in a way that meets the special resolution objectives set out in the Banking Act;^{footnote [12]} and applicable legislation. This includes, but is not limited to, consideration of the firm’s business model, funding model and risk profile (such as the relative size of cash or similar assets and the proportion of liabilities necessary for the continuity of a critical function) and the ability to conduct an orderly execution of the resolution strategy including effecting an orderly transfer to a third-party private sector purchaser. The Bank’s judgement as to the firm-specific adjustment required may change over time, for example in response to a change to a firm’s preferred resolution strategy or the size and composition of its balance sheet.

External MRELs – 2025