| LONDON, March 27
LONDON, March 27 Britain's banks discover on
Wednesday how much extra capital they need to keep regulators
happy when the outcome of an inquiry into their financial health
The Bank of England will release the capital requirements on
The BOE's Financial Policy Committee, tasked with spotting
system-wide risks, said in November that the shortfall could be
anywhere between 24 billion and 60 billion pounds ($91 billion).
Analysts expect the final number to be around the middle of that
Britain's banking supervisor Andrew Bailey has been checking
how banks tote up risks on their books to determine overall
capital requirements. He is concerned about inadequate
provisions for losses on loans, and sceptical about capital
figures the banks were coming up with using their in-house
Hefty compensation bills for mis-selling loan insurance, over
14 billion pounds ($21 billion) and rising, have also hit all
four of Britain's biggest banks.
But the focus will be on the Royal Bank of Scotland
and on Lloyds, in which the government has stakes it
would like to offload by the next election in 2015. Replenishing
capital buffers is an important step in making them marketable.
Analysts at Credit Suisse estimate that Britain's four
biggest banks - HSBC, Barclays, RBS and Lloyds
will need a total of 38 billion pounds of extra capital, though
11 billion pounds has already been raised since November when
Bailey's investigation began.
Credit Suisse believes no bank will need to go cap in hand to
investors and that shortfalls will be plugged by tapping
discretionary capital buffers and retaining earnings, meaning
limiting dividends and bonuses.