British banks must find £13.4b

Five British banks must find £13.4 billion (HK$162.4 billion) to plug a £27.1 billion capital shortfall by the end of the year, the Bank of England said.

The five banks, including Barclays, Lloyds Banking and Royal Bank of Scotland, have already submitted plans to raise half the total, the BOE said yesterday.

Lloyds must plan to raise an extra £7 billion, while RBS needs £3.2 billion and Barclays requires £1.7 billion of additional capital.

The strength of Britain's banking system is under scrutiny as the government considers selling its stake in Lloyds, which is 39 per cent owned by the state, and splitting up RBS. The Chancellor of the Exchequer, George Osborne, said in a speech in London on Wednesday that the government would proceed only "if we get value for the taxpayer".

RBS, which is 81 per cent state-owned, is weighed down by too many poor assets to go private immediately, Osborne said. RBS shares remain below the level at which taxpayers break even.

The central bank's Prudential Regulation Authority division took over as Britain's banking supervisor from the Financial Services Authority this year. In March, it outlined potential losses for banks of £52 billion. Banks must "hold capital resources equivalent to at least 7 per cent of their risk-weighted assets", with those losses taken into account, the BOE said.