Concerns over strength of RBS and Lloyds

The RBS headquarters at Gogarburn. Pic: Phil Wilkinson
The RBS headquarters at Gogarburn. Pic: Phil Wilkinson
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CONCERNS have been raised about the ability of both the Royal Bank of Scotland and Lloyds Banking Group to survive a future downturn in the economy.

A “stress test” carried out by the Bank of England The test, using the position of banks and building societies at the end of 2013, found RBS and Lloyds would be susceptible to such a crisis but improvements and changes to their plans this year did not require them to submit a new business plan.

Of eight banks tested only the Co-op was required to submit a new plan. The Bank found that a severe downturn with house prices plunging 35 per cent would wipe out the Co-op’s capital because of the effect on its risky loans.