EBA Issues Updated Risk Dashboard for Fourth Quarter of 2017
EBA published the updated version of its Risk Dashboard, summarizing the main risks and vulnerabilities in the EU banking sector for the fourth quarter of 2017. The dashboard shows significant improvements across EU banks, but elevated NPLs are still the main challenge for their profitability. Following the ESRB recommendation on commercial real estate markets, the EBA Risk Dashboard has an additional page showing the aggregated real estate exposures referred to real estate activities and the construction sector.
The progress is positive for European banks, but risks remain heightened on sustainable profitability. European banks continued to strengthen their capital ratios in the last quarter of 2017. The common equity tier 1 (CET1) ratio increased by 20 bps, from 14.6% in Q3 2017 to 14.8% in the fourth quarter of 2017, reaching a new peak since the fourth quarter of 2014. CET1 ratios are now above 11% for all institutions in the sample. The increase of capital ratios was driven by a decrease of the total risk exposures amount (mostly for credit risk). Additionally, EU banks continued to improve the overall quality of their loan portfolio. In the fourth quarter of 2017, the average ratio of non-performing loans (NPLs) to total loans continued its downward trend, reaching its lowest level since the fourth quarter of 2014 (4.0%). The widespread dispersion among EU countries (with ratios ranging from 0.7% to 44.9%), along with the still high amount of NPLs in banks' balance sheet, remains a vulnerability for the European banking sector as a whole.
The figures included in the Risk Dashboard are based on a sample of 149 banks, covering approximately 90% of the EU banking sector (by total assets), at the highest level of consolidation, while country aggregates may also include large subsidiaries.
Related Links
- Press Release
- EBA Dashboard for Q4 2017 (PDF)
- Risk Parameters Annex for Q4 2017 (PDF)
- Interactive Dashboard for Q4 2017 (XLSX)
Keywords: Europe, EU, Banking, Risk Dashboard, NPLs, CET1, EBA
Previous Article
FSB Chair Reports to G20 Leaders Ahead of the Buenos Aires SummitRelated Articles
BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
EBA Issues Guide on Bank Resolvability, Consults on Transferability
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
FCA Registers Securitization Repositories; PRA Issues 2022 Priorities
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
EC Regulation Sets Out Methods for Measuring K-Factors Under IFR
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
BIS Studies How Platform Models Impact Financial Stability & Inclusion
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
CBE Issues Additional Measures to Ease Disruptions from Pandemic
The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.
ESAs Publish List of Financial Conglomerates for 2021
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.
