Co-Op assets cut after stress tests

Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, Britain’s two publicly owned lenders, barely passed the Bank of England’s first stress test, while Co-Operative Bank Plc failed.

Co-Operative Bank will now cut £5.5bn more assets by 2018 under a plan agreed with the regulator. RBS said it will sell £2bn notes to bolster capital. None of the banks will have to sell new stock.

The BOE follows its US and European counterparts in using stress tests to try to revive investor confidence in lenders. Six years after the financial crisis, shares of four of the UK’s five largest banks trade for less than their book value, or total assets.