25th Jun 2014 06:35
LONDON (Alliance News) - HSBC Holdings PLC and Royal Bank of Scotland Group PLC have been granted extensions for the resubmission of the capital plans for their US units to the Federal Reserve, which means they will not be able to increase their capital distributions to their parent companies until at least 2015.
In a statement Tuesday, the Federal Reserve said that the banks, along with the US's Citigroup Inc and Spain's Banco Santander SA, will not have to re-submit the capital plans until January 5, 2015, the due date for the next round of annual plans, after they requested an extension to the original deadline which had been scheduled for Thursday.
"The extensions will give the firms additional time to address the capital planning weaknesses identified by the Federal Reserve. The firms will not be able to increase their capital distributions until a new capital plan is approved," the Federal Reserve said in a statement.
The capital plans were objected under the Fed's 2014 comprehensive capital analysis and review, an annual exercise to ensure that large financial institutions have robust capital-planning processes that account for their risks, and to help ensure that they have sufficient capital to continue operations throughout times of economic and financial stress.
In March, the Fed said that both HSBC North America and RBS Citizens had significant deficiencies in their capital planning processes, including "inadequate governance and weak internal controls around the processes."
By Samuel Agini; [email protected]; @samuelagini
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