EBA Publishes Risk Dashboard for the Second Quarter of 2018
EBA published the periodical update to its risk dashboard for the Second Quarter of 2018. The dashboard summarizes the main risks and vulnerabilities in the EU banking sector using quantitative risk indicators. In the second quarter of 2018, the updated risk dashboard showed sustained improvements in the management of nonperforming loans (NPLs) across EU, with bank profitability remaining a key challenge.
The dashboard showed that capital ratios of European banks remained high, in line with the first quarter of 2018. The common equity tier 1 (CET1) ratio remained at 14.5%, with a slight increase in the value of CET1 capital, accompanied by an increase in total risk exposures. CET1 ratios remained above 12% for all countries in the sample. Additionally, EU banks continued to improve the overall quality of their loan portfolio. The ratio of NPLs to total loans kept the downward trend and achieved a level of 3.6%, the lowest since the NPL definition was harmonized across European countries. The leverage ratio (fully phased-in) remained at 5.1% when compared to the first quarter of 2018. The asset encumbrance ratio decreased from 28.4% in the first quarter of 2018 to 28% in the second quarter of 2018. The liquidity coverage ratio rose to 148.2% from 147% in the first quarter of 2018, remaining well above the 100% requirement.
The data in the risk dashboard are based on a sample of 150 banks, covering more than 80% of the EU banking sector (by total assets), at the highest level of consolidation, while country aggregates may also include large. IFRS 9, which entered into force on January 01, 2018, may have had an impact on some of the ratios included in the dashboard.
Related Links
- Press Release
- Risk Dashboard (PDF)
- Interactive Dashboard (XLSX)
- Annex on Credit Risk Parameters (PDF)
Keywords: Europe, EU, Banking, Basel III, Risk Dashboard, NPLs, IFRS 9, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
CBIRC Issues Measures to Manage Liquidity Risk for Commercial BanksRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
