This statement sets out the Systemic Risk Buffer rates applicable from 1 August 2019.
From 1 January 2019, the Prudential Regulation Authority (PRA) is required to set Systemic Risk Buffer (SRB) rates for ring-fenced banks (RFBs) and large building societies (together, ‘SRB institutions’) by applying the Financial Policy Committee (FPC)’s framework for the SRB. The PRA has set out its approach to the implementation of the SRB in its Statement of Policy.
The PRA has set SRB rates by applying the FPC’s framework to the total assets of the SRB institutions as of end-December 2018, assessed on a sub-consolidated basis for RFBs, and on a consolidated basis for building societies.
The SRB rates set out in this document will apply from 1 August 2019. In future, the PRA expects to publish the SRB rates by 15 December of each year, with application by 1 January of the second year following the calendar year when the rates are published.
Ring-fenced banks
The PRA has set SRB rates for the RFBs in the following RFB sub-groups, which apply to all exposures, on a sub-consolidated basis:
| Systemic Risk Buffer rate (% of RWAs) |
Lloyds Banking Group RFB sub-group | 2% |
Royal Bank of Scotland RFB sub-group | 1.5% |
Barclays RFB sub-group | 1% |
HSBC RFB sub-group | 1% |
Santander UK RFB sub-group | 1% |
See Annex for the RFBs in the RFB sub-groups
For these 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 SRB rate, there will be an increase in both the group PRA buffer and the Leverage Ratio Group Add-on. 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 set an SRB rate for the following building society, which applies to all exposures, on a consolidated basis.
| Systemic Risk Buffer rate (% of RWAs) |
Nationwide Building Society | 1% |
Annex – RFBs in RFB sub-groups
RFB sub-group | RFBs in the RFB sub-group |
Lloyds Banking Group RFB sub-group | Lloyds Bank Plc Bank of Scotland Plc |
Royal Bank of Scotland RFB sub-group | National Westminster Bank Plc The Royal Bank of Scotland Plc Coutts & Company Ulster Bank Limited |
Barclays RFB sub-group | Barclays Bank UK Plc |
HSBC RFB sub-group | HSBC UK Bank Plc Marks and Spencer Financial Services Plc HSBC Private Bank (UK) Ltd HSBC Trust Company (UK) Ltd |
Santander UK RFB sub-group | Santander UK Plc Cater Allen Limited |