The Prudential Regulation Authority (PRA) is requiredfootnote [1] to set Other Systemically Important Institutions (O-SII) buffer rates for ring-fenced banks (RFBs), large domestic banks, and large building societies by applying the Financial Policy Committee (FPC)’s framework for the O-SII buffer. This framework was last updated by the FPC on 29 July 2025.
In line with the FPC’s updated framework, the PRA has set O-SII buffer rates based on the average of quarter-end UK leverage exposure measure data over 2024 – assessed on a sub-consolidated basis for RFBs, and on a consolidated basis for building societies. The O-SII buffer rates set out in this publication will apply from 1 January 2027.
Ring-fenced banks
The PRA has issued O-SII buffer rates for the following RFB sub-groups, which apply to all exposures,footnote [2] on a sub-consolidated basis.
|
O-SII buffer rate (% of RWAs) |
|
|---|---|
|
Lloyds Banking Group RFB sub-group |
2.0% |
|
NatWest RFB sub-group |
1.5% |
|
HSBC RFB sub-group |
1.0% |
|
Barclays RFB sub-group |
1.0% |
|
Santander UK RFB sub-group |
1.0% |
See Which firms does the PRA regulate? for the RFBs in the RFB sub-groups
For RFBs, if the group is not subject to a global systemically important bank (G-SIB) buffer, or if the group has a G-SIB buffer rate that is lower than the O-SII buffer rate, there will be an increase in both the group PRA bufferfootnote [3] and the Leverage Ratio Group Add-on.footnote [4] This is to ensure that, where systemic buffers apply at different levels of consolidation, there is sufficient capital within the consolidated group, and distributed appropriately across it, to address both global systemic risks and domestic systemic risks.
Building societies
The PRA has issued an O-SII buffer rate for the following building society, which applies to all exposures, on a consolidated basis.
|
O-SII buffer rate (% of RWAs) |
|
|---|---|
|
Nationwide Building Society |
1.0% |
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The Capital Buffers and Macro-prudential Measures Regulations 2025, No. 653, Part 3, Reg 18.
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The O-SII buffer rate applies to exposures located anywhere in the world.
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The amount of group PRA buffer for RFB group risk will be informed by the amount by which the O-SII buffer exceeds the RFB sub-group’s share of any G-SIB buffer at the group level. See Section II: Pillar 2B of The PRA's methodologies for setting Pillar 2 capital.
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The ‘Leverage Ratio Group Add-on’ will be informed by the amount by which any additional leverage ratio buffer (ALRB) applicable on a sub-consolidated basis for the RFB sub-group is higher than the RFB subgroup’s share of the ALRB on a consolidated basis. See supervisory statement (SS) 45/15 – The UK leverage ratio framework.