The building society issued a capital update last night which corrected the company’s calculation of risk-weighted assets.

Coventry Building Society said that it had overstated its risk-weighted assets by £222 million as of June 30th.

The correction lowers the building society’s Common Equity Tier 1 ratio reported at 30th June 2019 by 1.6% to 32.6% to 34.2%.

The building society is the UK’s fourth-largest with total assets amounting to £11 billion.

In the capital update, it revealed that the mistakes which dated back as far as 2008 were discovered late last month.

Coventry Building Society is continuing to study the mistake with the Prudential Regulation Authority, the body which supervises building societies.

The exaggeration echoes the crisis faced by Metro Bank in January this year, when it revealed that it had miscategorised some mortgages as less risky than they actually were, which in turn understated its risk-weighted assets and overstate the bank’s financial strength.

However, Coventry Building Society stressed that its error was different and it had applied the incorrect multiple or “scalar” at the conclusion of its modelling exercise.

The society wrote in its capital update: “The society uses internal ratings-based models to calculate its risk-weighted assets and is seeking to update these models to ensure compliance with upcoming Basel III reforms.

“During the process of transitioning models, the society has identified an omission in connection with its historic calculation of its RWAs. Specifically, the necessary 6 per cent scalar was not applied to the core IRB model outputs.”