Co-op, Nationwide & Lloyds property portfolios fare worst in stress test

The Bank of England’s stress testing of the UK banking system has exposed The Co-operative Bank, Lloyds Banking Group and Nationwide’s real estate loan books as being the most volatile in the case of a severe economic downturn. In the hypothetical scenario created by the Bank of England, which included a 30% drop in commercial real estate values, it was expected that the Co-operative Bank – the only bank to fail the broader stress test - would have to write off 19.1% of the value of its loans, Nationwide 16.3% and Lloyds 16.1%.