On July 20, 2017, we published an update to our risk-adjusted capital (RAC) framework methodology. The impact on the RAC ratio of Nationwide Building Society (Nationwide) is immaterial under the new methodology, and our updated calculation of Nationwide's RAC ratio of 9.9% (as of April 4, 2017) confirmed our belief that its capitalization, by our measure, is steadily improving. We project Nationwide's RAC ratio will be 10.0%-10.5% over the coming 18-24 months. However, we are maintaining our adequate capital and earnings assessment in the context of our negative trend for economic risk in the U.K. An increase in economic risk would weaken Nationwide's capitalization because it would lead to higher risk-weights and a sharply lower RAC ratio, given Nationwide's concentrated
