A statement released by the bank today said its capital base has reduced to a level below minimum regulatory capital requirement, but business is still operating as normal.
However, a waiver granted in July last year by the Financial Services Authority meant it met minimum regulatory capital requirements.
The Government-owned bank is now proposing to address this situation through a legal and capital restructuring of the company, providing that its application for state aid is approved by the European Commission and once the split of the company is completed in the second half of the year.
The FSA has confirmed that it does not currently intend to restrict the activities of the bank while its restructuring plan is implemented to address its capital position.
The FSA will continue to monitor the firm’s position closely.