Big UK banks have £278 billion exposure to ‘junk’ loans
Non-investment grade exposures make up 31% of total corporate exposures
The top five UK banks had more than a quarter of a trillion of exposures to non-investment grade, or 'junk', loans, an asset class the Bank of England has pledged to scrutinise in coming months.
Barclays, HSBC, Lloyds, RBS and Standard Chartered had approximately £905 billion of corporate loan exposures, as measured using their respective internal ratings-based (IRB) models, as of end-June.
Of this amount, around 31% were assigned probabilities-of-default (PD) equal to a Standard & Poor’s
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