16 DECEMBER 2019
NATIONWIDE'S RESPONSE TO THE RESULTS OF THE BANK OF ENGLAND STRESS TEST 2019
Today the Bank of England issued the results of its latest Concurrent Stress Test. The specified hypothetical Annual Cyclical Scenario (ACS) 2019 was consistent with ACS 2018 with a 33% fall in house prices and 9.2% peak in unemployment, and a rapid increase in Bank Base Rate to 4% in the first year of the scenario.
Consistent with the results of ACS 2018, the results of ACS 2019 confirm that Nationwide would remain profitable in such conditions and continue to make full distributions on all Tier 1 capital instruments, with a minimum stressed CET1 ratio of 13.1%, and a minimum UK leverage ratio of 4.8%, after the application of management actions. In each case the Society remains substantially above the regulatory hurdle rates set for this stress test of 7.9% CET1 ratio and 3.57% UK leverage ratio, both before and after the application of management actions.
The PRA has confirmed that Nationwide is not required to submit a revised capital plan or take additional actions as a result of this stress test exercise.
Nationwide recognises the value of industry-wide stress testing and continues to support the financial stability objectives of the Financial Policy Committee and the Bank of England.
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