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Coventry BS admits overstating capital position

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  • 12/12/2019
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Coventry BS admits overstating capital position
Coventry Building Society has confirmed it has been making an accounting error when calculating its capital ratios, effectively overstating the strength of its financial position.

 

In a capital update published on its website, the mutual said that it had uncovered an ommission in its calculations of risk weighted assets. 

As a result, its common equity tier one (CET1) ratio, which was reported at 34.2 per cent back in June is actually 32.6 per cent.

In its update, Coventry said: “The society maintains a simple and low risk business model and expects that its CET1 ratio will continue to be one of the highest reported in the UK, reflecting a considerable capital surplus above regulatory requirements. 

“These updates do not affect the leverage ratio, which the society expects to be its binding capital measure in future.”

To put Coventry’s CET1 in context with the two biggest lenders in the market, Lloyds Banking Group’s currently stands at 13.5 per cent, while Nationwide’s is 32.4 per cent.

 

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