Coventry Building Society Coventry Building Society Capital Update (5874W)

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RNS Number : 5874W

Coventry Building Society

11 December 2019

Coventry Building Society capital update.

This announcement contains inside information

11 December 2019

Capital update

Coventry Building Society (the "Society") announces a correction to its calculation of risk weighted assets. This lowers its Common Equity Tier 1 ("CET1") ratio reported at 30(th) June 2019 by 1.6% to 32.6% from 34.2%(1) .

The Society uses Internal Ratings Based ("IRB") models to calculate its Risk Weighted Assets ("RWAs") and is seeking to update these models to ensure compliance with upcoming Basel III reforms(2) . During the process of transitioning models, the Society has identified an omission in connection with its historic calculation of its RWAs. Specifically, the necessary 6% scalar was not applied to the core IRB model outputs. The core IRB models themselves are not impacted. Application of the 6% scalar would have increased total RWAs by 4.6%, resulting in the 1.6% reduction in the CET1 ratio, as at 30(th) June 2019. The previous guidance provided by the Society on the transitional and end-state impact on its CET1 ratio of standardised floors within Basel IV remains unchanged.

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.

Inside information notice

This announcement relates to the disclosure of information that qualified, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (Regulation (EU) No. 596/2014) ("MAR"). For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, the person responsible for arranging the release of this announcement on behalf of Coventry Building Society is Michele Faull, Chief Financial Officer.

Media enquiries should be directed to:

Richard Field

Head of Communications

0800 121 6868

Please note that revised capital tables can be viewed on the Society's website: https://www.coventrybuildingsociety.co.uk/consumer/our-performance/financial-results/archive.html

(1) (As at 30 June 2019)

(2 Also commonly referred to as Basel IV)

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