O-SII buffer rates for ring-fenced banks and large building societies
The Prudential Regulation Authority (PRA) is requiredfootnote [1] to set Other Systemically Important Institutions (O-SII) buffer rates for ring-fenced banks (RFBs) and large building societies by applying the Financial Policy Committee (FPC)’s framework for the O-SII buffer.
On 29 July 2025, the FPC finalised the review of the O-SII buffer framework, confirming its decision to index O-SII buffer rate thresholds. The PRA has therefore reissued the O-SII buffer rates for 2024 to reflect this updated framework, as previously communicated.footnote [2] The revised 2024 O-SII buffer rates set out in this publication are based on the average of quarter-end UK leverage exposure measure (LEM) data over 2023 – assessed on a sub-consolidated basis for RFBs, and on a consolidated basis for building societies – and will apply from 1 January 2026.
Ring-fenced banks
The PRA has reissued O-SII buffer rates for the following RFB sub-groups, which apply to all exposures,footnote [3] on a sub-consolidated basis.
O-SII buffer rates for RFB sub-groups
O-SII buffer rate (% of RWAs) | |
|---|---|
Lloyds Banking Group RFB sub-group | 2.0% |
NatWest RFB sub-group | 1.5% |
HSBC RFB sub-group | 1.0% |
Barclays RFB sub-group | 1.0% |
Santander UK RFB sub-group | 1.0% |
Footnotes
- See annex for the RFBs in the RFB sub-groups
For 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 O-SII buffer rate, there will be an increase in both the group PRA bufferfootnote [4] and the Leverage Ratio Group Add-on.footnote [5] 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 reissued an O-SII buffer rate for the following building society, which applies to all exposures, on a consolidated basis.
O-SII buffer rates for building societies
O-SII buffer rate (% of RWAs) | |
|---|---|
Nationwide Building Society | 1.0% |
Annex – RFBs in RFB sub-groups
RFBs in RFB sub-groups
RFG sub-group | RFBs in the RFB sub-group |
|---|---|
Lloyds Banking Group RFB sub-group | Lloyds Bank Plc Bank of Scotland Plc |
NatWest RFB sub-group | National Westminster Bank Plc The Royal Bank of Scotland Plc Coutts & Company |
HSBC RFB sub-group | HSBC UK Bank Plc Marks and Spencer Financial Services Plc HSBC Trust Company (UK) Ltd |
Barclays RFB sub-group | Barclays Bank UK Plc |
Santander UK RFB sub-group | Santander UK Plc Cater Allen Limited |
See the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 Sections 34ZB and 34ZG (‘The Capital Buffers Regulation’). From 31 July 2025 the Capital Buffers and Macro-prudential Measures Regulations 2025 will take effect.
O-SII buffer rates for ring-fenced banks and large building societies.
The O-SII buffer rate applies to exposures located anywhere in the world.
The amount of group PRA buffer for RFB group risk will be informed by the amount by which the O-SII buffer exceeds the RFB sub-group’s share of any G-SIB buffer at the group level. See Section II: Pillar 2B of The PRA's methodologies for setting Pillar 2 capital.
The ‘Leverage Ratio Group Add-on’ will be informed by the amount by which any additional leverage ratio buffer (ALRB) applicable on a sub-consolidated basis for the RFB sub-group is higher than the RFB subgroup’s share of the ALRB on a consolidated basis. See SS45/15 - The UK leverage ratio framework.