Banking sector regulatory capital - 2024 Q3

The key points for 2024 Q3:

• The Common Equity Tier 1 (CET1) capital ratio for the UK banking sector has increased by 0.1 percentage point to 16.0%.
• The level of CET1 capital decreased by 1.9% on the quarter, from £469bn to £460bn.
• The level of total risk-weighted assets decreased by 2.3% from £2,943bn to £2,876bn 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)}

Footnotes

• (a) See Further details about these data for information on the calculation of these contributions.
• (b) Data for all charts has been sourced from the banking sector regulatory capital data tables.

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)

Footnotes

• (a) From 1 January 2022, regulatory changes, designed to strengthen the capital framework, were introduced which had an impact on firms’ capital and risk-weighted assets. This included more prudent approaches to the calculation of risk-weighted assets and the treatment of intangible software assets for regulatory capital. These changes are described in more detail in the December 2021 Financial Stability Report.

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 2025

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