United Kingdom's Prudential Regulation Authority raises leverage ratio retail deposits threshold to GBP 75 billion and introduces three-year averaging

The Prudential Regulation Authority (PRA) has published a policy statement finalising changes to the UK leverage ratio framework’s retail deposits threshold, increasing it from GBP 50 billion to GBP 75 billion and introducing a three-year averaging mechanism for measuring firms’ retail deposits when assessing whether the requirement applies. The final rules amend the Leverage Ratio (CRR) Part of the PRA Rulebook and update Supervisory Statement 45/15, and apply to Capital Requirements Regulation (CRR) firms and CRR consolidation entities on an individual, consolidated and, where relevant, sub-consolidated basis. The PRA moved from its consulted GBP 70 billion threshold to GBP 75 billion to reflect further nominal UK GDP growth since consultation and to restore the Financial Policy Committee’s original risk appetite, while the three-year moving average is intended to smooth “cliff-edge” effects and improve firms’ ability to plan for entering scope. The PRA left the internationally active firm test unchanged, retaining both the GBP 10 billion non-UK assets threshold and its metric. The policy takes effect on 1 January 2026. Modifications by consent that had allowed certain firms to disapply the Leverage Ratio – Capital Requirements and Buffers Part of the PRA Rulebook during the review period will cease to apply on 30 June 2026, and the PRA will continue to assess both leverage ratio thresholds through the Financial Policy Committee’s annual reviews of the overall leverage ratio framework.