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Barclays was subject to the 2018 EU‐wide stress test conducted by the European Banking Authority (EBA), in cooperation with the Bank of England (BoE), the European Central Bank (ECB) and the European Systemic Risk Board (ESRB).
Barclays notes the announcements made today by the EBA on the EU‐wide stress test and fully acknowledges the outcome of this exercise. The stress test results in a reduction of Barclays CRD IV Transitional Common Equity Tier 1 ("CET1") ratio to 7.3% from the 2017 year-end position of 13.3%.
The 2018 EU‐wide stress test does not contain a pass fail threshold. The results will assist competent authorities in assessing Barclays' ability to meet applicable prudential requirements under stress scenarios.
The adverse stress test scenario was set by the ECB/ESRB and covers a three‐year time horizon (2018‐2020). It is the first EBA stress test under the IFRS9 accounting standard. The stress test has been carried out applying a static balance sheet assumption as at December 2017, and therefore does not take into account subsequent or future business strategies and management actions. It is not a forecast of Barclays' profits.
While the results of the exercise will constitute an input to the 2018 supervisory review process, Barclays' capital requirements will primarily be informed by the BoE stress test, which is due to be published on 5 December 2018.
Barclays' 30 September 2018 CET1 ratio was 13.2%, and Barclays remains comfortable with its target CET1 ratio of c.13%, which is currently 160bps above the expected end state regulatory minimum level.
Barclays' Euro-denominated results in the EBA template can be found at www.barclays.com/barclays-investor-relations/investor-news.html. The standardised disclosure templates have been developed by the EBA to help improve comparability and consistency between the stress test results of participating banks. The templates include detailed information on composition of capital, profit and loss, credit risk, securitisations, risk weighted assets, non-performing/forborne exposures and major measures and realised losses in 2018.
