Royal Bank of Scotland Plunges As The Bank Fails BOE Stress Test

Shares of Royal Bank of Scotland Group plummet nearly 5% on Wednesday as state-backed lender failed this year’s stress test of seven British lenders. According to the Bank of England, RBS must come up with a revised plan to raise capital by around £2 billion ($2.49 billion).

The bank rushed out a statement following the announcement, stating that it would take a range of actions, including selling off bad loans and cutting costs to make up the capital shortfall and meet regulatory requirements.

The annual health checks also revealed capital inadequacies at two other banks, namely Barclays PLC and Standard Chartered PLC, but neither bank needs to change its capital plans as they have already undertaken capital strengthening measures.

The result underlines RBS’s problems including a rising legal bill for misconduct ahead of the 2008 financial crisis, not to mention difficulties selling off assets such as its Williams & Glyn banking business.

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