Santander UK notes the publication of the results of the 2021 stress tests conducted on eight major UK banks and building societies by the Bank of England. Santander UK passed the stress test without any requirement for management actions, demonstrating our resilient balance sheet and prudent approach to risk. As a result of the exercise, the Bank of England does not require Santander UK to undertake any actions.
Duke Dayal, Chief Financial Officer at Santander UK commented: "The 2021 solvency stress test has allowed the Bank of England to examine a severe stress scenario for the UK economy. The results show that Santander UK has more than adequate capital to withstand such a stress and that we continue to be well positioned to grow and to support our customers over the years ahead.”
In detail – Santander’s results were as follows
• Santander UK's lowest post-stress common equity tier 1 ('CET 1') capital ratio was modelled to be 11.2% before management actions. This is defined as CET1 capital expressed as a percentage of risk-weighted assets, where these are in line with CRR and the UK implementation of CRD V via the PRA Rulebook.
• Santander UK's lowest post-stress Tier 1 leverage ratio was modelled to be 4.1% before management actions. The Tier 1 leverage ratio is Tier 1 capital expressed as a percentage of the leverage exposure measure excluding central bank reserves, as defined in Rule 1.2 of the Leverage Ratio part of the PRA Rulebook.
These results are in excess of the CET 1 reference rate established by the Bank of England of 8.2% and the leverage reference rate of 3.5%.
Santander UK reported a CET 1 capital ratio of 16.6% and Leverage ratio of 5.4% as at 30 September 2021.
The Bank of England’s CET1 reference rate comprises the CRR Pillar 1 minimum of 4.5% together with a Pillar 2A CET1 requirement, an estimate of the applicable Systemic Risk Buffer and an adjustment to offset the pro-cyclical impacts of IFRS 9.
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Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 30 June 2021, the bank had around 20,900 employees and serves around 14 million active customers, via a nationwide branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers’ eligible deposits are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful presence in 10 core markets in the Europe, North America and South America regions, and is one of the largest banks in the world by market capitalization. Its purpose is to help people and businesses prosper in a simple, personal and fair way. Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising over €120 billion in green financing between 2019 and 2025, as well as financially empowering more than 10 million people over the same period. At the end of the first half of 2021, Banco Santander had €1.1 trillion in total funds, 150 million customers, of which 24.2 million are loyal and 45.3 million are digital, 10,000 branches and 190,000 employees.
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