Capital levels in the UK banking sector remain firm in the second quarter of 2026 as lenders absorb a modest rise in risk-weighted assets. Common Equity Tier 1 capital increases to £470 billion while the sector's CET1 ratio stays unchanged at 15.1%, indicating continued balance sheet resilience.
Highlights
- UK banking sector's CET1 capital ratio held steady at 15.1% in 2026 Q2, as reported by the Bank of England's Prudential Regulation Authority.
- CET1 capital increased 1.6% to £470 billion while total risk-weighted assets rose 1.9% to £3,118 billion for the quarter.
- The total capital ratio was 20.3% and Tier 1 capital ratio reached 17.6%, indicating maintained capital buffers amid rising risk exposure.
Quarterly capital data for 2026 Q2
As reported by Bank of England, citing the Prudential Regulation Authority, the quarterly statistical release shows the UK banking sector's core capital position stays stable in 2026 Q2 even as risk exposure rises. The publication, released on 30 September 2026, tracks capital levels, risk-weighted assets and movements across different tiers of regulatory capital.The sector's CET1 capital ratio remains at 15.1% in the quarter. CET1 capital rises 1.6% from £463 billion to £470 billion, while total risk-weighted assets increase 1.9% from £3,059 billion to £3,118 billion.
Key figures in the release put the total capital ratio at 20.3% and the Tier 1 capital ratio at 17.6%. The data also provide breakdowns of changes by risk exposure type and by different layers of capital held by banks.
Resilience signal for UK banking
The steady CET1 ratio suggests the sector is maintaining its capital buffers despite an increase in risk-weighted assets during the quarter. That points to a robust regulatory capital position as banks continue to navigate broader economic change.For the UK banking industry, stable core capital levels are a closely watched indicator of loss-absorbing capacity and balance sheet strength. The latest figures suggest the sector enters the second half of 2026 with capital ratios broadly intact.
Our earlier coverage of the upward revision to UK second-quarter GDP showed the economy grew 0.5% in the three months to June, supported by stronger services output and a firmer picture of business investment. We noted the revised figures reinforced a narrative of resilience heading into the Budget, with services growth and higher investment suggesting underlying momentum despite broader uncertainty.
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