Banking sector regulatory capital - 2023 Q3

The key points for 2023 Q3:

• The Common Equity Tier 1 (CET1) capital ratio for the UK banking sector remained stable at 15.9%.
• The level of CET1 capital increased by 1.7% on the quarter, from £463bn to £471bn.
• The level of total risk-weighted assets increased by 1.5% from £2,918bn to £2,963bn this quarter.

Table A: Capital ratios and levels of capital and risk-weighted assets in the UK banking sector ^(a)

Chart 1: Capital ratios for the UK banking sector

Chart 2: Contributions to quarterly change in total capital ratio ^{(a) (b)}

Table B: Risk-weighted assets by risk type (£ billions) ^(a)

Chart 3: Changes in risk-weighted assets by risk type

Comparison of capital ratios with other publications

Capital ratios for the UK banking sector are published by the Bank of England (BoE) and the International Monetary Fund (IMF). Chart 4 shows a comparison of published capital ratios for the UK and the details of their differences are explained below. Table C provides descriptions of the underlying datasets and links to their definitions.

Chart 4: Comparison of published capital ratios for the UK ^(a)

The effects of the differences in datasets and methodologies can be generalised as follows:

• Firm coverage – the BoE and the IMF publish capital ratios that represent averages of the total UK banking sector. While they all use the same data, the IMF publications are updated with a lag. This means that the latest quarterly figures are not available at the time of this publication and may include minor differences because this release’s chart is not using the latest vintage at this point of publication. The Financial Policy Committee’s (FPC) indicators^{footnote [1]} cover major UK banks^{footnote [2]} only, rather than the total UK banking sector, and this generally has a downward effect on the ratio.
• Use of transitional or endpoint capital^{footnote [3]} – the use of endpoint capital will tend to have a slight downward effect on ratios, compared to those using transitional capital.
• Timing – both timeliness and frequency vary across datasets. The banking sector regulatory capital statistical release and FPC indicators are the timeliest.

Table C: Description of different published capital ratios for the UK

Next release – 28 March 2024