PRA: UK banks have £27bn capital hole

<p>Banks in the UK have a capital hole worth £27 billion, the PRA claims.</p>

Some of the UK's biggest banks need to raise capital to plug a hole worth a total of £27 billion, according to a new report.

The Prudential Regulation Authority (PRA) suggested that the main cause for concern is Royal Bank of Scotland (RBS), which accounts for £13.6 billion of the total.

Nationwide was revealed by the body to have a small shortfall of £400,000, while Lloyds Banking Group accounted for £8.6 billion of the £27.1 billion total and Barclays £3 billion.

The PRA stated that the banks have failed to meet guidelines suggesting they hold capital resources of at least seven per cent of their "risk-weighted assets". The Bank of England's Financial Policy Committee asked the PRA to review UK banks' financial health against new rules laid down by central banks of the world's major economies.

RBS recently announced it is to cut 2,000 jobs, while it was also revealed that its chief executive Stephen Hester is set to step down from the role ahead of the reprivatisation of the bank.

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