RBS stressed out again

RBS building

Royal Bank of Scotland has said it overstated a key capital ratio in last month’s European stress test, sending the stock briefly to a three-week low.

Bloomberg News reports that RBS’s fully loaded common equity Tier 1 ratio, a measure of financial strength, should have been 5.7% in the adverse scenario used by the European Banking Authority instead of the 6.7% it reported on October 26, the lender said in a statement today. The minimum pass mark was 5.5%.

“It’s unhelpful, but it’s not particularly relevant,” said Joseph Dickerson, an analyst at Jefferies International in London with a buy rating on the stock. “In the case of RBS, the EBA stress test is particularly backward looking. It uses December 31, 2013 balance sheet data.”

To access the complete Bloomberg News article hit the link below:

RBS Says It Overstated Capital Ratio in European Stress Test

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