Banking sector regulatory capital - 2021 Q2

This quarterly statistical release shows levels of capital and risk-weighted assets for the UK banking sector. It includes breakdowns of the movements in different tiers of capital and risk exposure types, and overall capital ratios.
Published on 11 October 2021

Key points

  • The Common Equity Tier 1 (CET1) capital ratio for the UK banking sector increased by 0.3 percentage points on the quarter to 16.4%.
  • The level of CET1 capital increased by 1.3% on the quarter, from £448bn to £454bn.
  • There was a 0.4% decrease in total risk-weighted assets on the quarter, from £2,787bn to £2,775bn.  

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

2020 Q2

2020 Q3

2020 Q4

2021 Q1

2021 Q2

One quarter

Four quarters

Ratios (per cent)

Change (percentage points)

Total capital

21.3

21.7

21.6

21.3

21.6

0.3

0.4

Tier1

17.9

18.4

18.5

18.4

18.6

0.3

0.7

CET1

15.7

16.1

16.3

16.1

16.4

0.3

0.6

Values (£ billions)

Change (per cent)

Total capital

633

624

606

594

600

1.0

-5.2

of which: Tier1

534

529

520

512

517

1.0

-3.2

of which: CET1

468

464

457

448

454

1.3

-3.0

of which: Tier2

99

95

86

83

83

0.0

-16.2

Risk-weighted assets

2,976

2,880

2,804

2,787

2,775

-0.4

-6.8

Footnotes

  • (a) Figures throughout this document may not correspond exactly due to rounding.

Chart 1: Capital ratios for the UK banking sector

Lines represent the total capital ratio, Tier 1 and CET 1 ratio of the UK banking sector over the past 18 quarters. All the three ratios have increased in 2021 Q2.

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

Bars represent contributions made by the quarterly percentage changes in the levels of risk-weighted assets (RWAs), tier 1 and tier 2 capital on the quarterly percentage change in total capital ratio over the past six quarters. A fall in RWAs and an increase in Tier 1 capital levels had a positive impact on total capital ratio in 2021 Q2.

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)

2020 Q2

2020 Q3

2020 Q4

2021 Q1

2021 Q2

One quarter

Four quarters

Values (£ billions)

Change (per cent)

Total risk-weighted assets

2,976

2,880

2,804

2,787

2,775

-0.4

-6.8

Credit and counterparty risk

2,119

2,078

2,027

2,018

2,012

-0.3

-5.0

Market risk

433

389

379

381

379

-0.5

-12.5

Operational risk

302

296

289

285

288

1.1

-4.6

Credit Valuation Adjustment

98

87

77

75

69

-8.0

-29.6

Other

25

30

33

28

26

-7.1

4.0

Footnotes

  • (a) The categories of risk-weighted assets used are as defined in the reporting templates in the annexes to the Implementing Technical Standards (ITS) on Supervisory Reporting (Regulation (EU) No 573/2013).

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

Bars represent the breakdown of quarterly changes in the levels of risk-weighted assets (RWAs) by type over the past six quarters. There has been a fall across most of the published risk types within RWAs.

Comparison of published capital ratios for the UK and the EU

Capital ratios for the UK banking sector are published by a number of organisations; the Bank of England (BoE), the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Banking Authority (EBA). These ratios are not identical due to differences in firm coverage, use of transitional or endpoint capital, method of averaging and data revisions as explained below. Chart 4 shows a comparison of published capital ratios for the UK in the panel on the left with EU average ratios published by the EBA in the panel on the right. Table C provides descriptions of the underlying datasets and provides links to their definitions.

Chart 4: Comparison of published capital ratios for the UK and the EU