UK banks should raise 13.7 billion pounds more for self-insurance

Bank of England said in a statement today that five UK – based banks should raise 13.7 billion pounds more to offset the 27 billion pound gap in capital.

In March 2013, Bank of England said lenders could face losses of about 50 billion pounds over the next three years, relating to bad loans and fines. Lenders must “hold capital resources equivalent to at least 7% of their risk weighted assets,” with those losses taken into account, the BOE said.

As of right now, the five lenders, Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, have already issued plans to raise 12.5 billion of the total, Bank of England stated.

BOE posted financial targets for the five banks to follow in order to fill the gap in capital and defend themselves of possible bad loans. The banks haven’t reported how much they have raised till date.

Barclays indicated it was “confident it will exceed” the requirements by the 2013 deadline. Lloyds and RBS said earlier this year they could meet the requirements without needing to raise additional equity.

Lloyds, Britain’s biggest mortgage lender, slipped 0.1% at 10:00 a.m. London time, Barclays lost 1.7% , while RBS dropped 2.47%, HSBC fell 2.05%.

Other banks such as Standard Chartered, HSBC Holdings and Banco Santander SAs U.K. unit have already complied with the recommendation, while Nationwide Building Society needs to raise 400 million pounds of capital.