Featured Product

    EBA Releases Spring 2020 Transparency Exercise Data on Banks in EU

    June 08, 2020

    EBA published bank-by-bank data from the seventh transparency exercise in EU. This additional data disclosure comes as a response to the outbreak of COVID-19 and provides market participants with bank-level data as of December 31, 2019, prior to the start of the crisis. Along with the data set, EBA also provided a document highlighting the key statistics derived from the data set and a wide range of interactive tools that allow users to compare and visualize data by using maps at a country and a bank-by-bank level. The data confirm that the banking sector in EU entered the crisis with solid capital positions and improved asset quality, but also shows the significant dispersion across banks.

    In the context of an unprecedented health crisis, EU-wide transparency data confirms banks entered this challenging period in a stronger position than in previous crises. Compared with the Global Financial Crisis in 2008-2009, banks now hold larger capital and liquidity buffers. EU banks reported increasing capital ratios in 2019. The EU weighted-average common equity tier 1 (CET1) fully loaded capital ratio was at 14.8% as of the fourth quarter of 2019, nearly 40 bps higher than in the third quarter of 2019. The trend was supported by higher capital, but also contracting risk exposure amounts. As of December 2019, 75% of the banks reported a CET1 fully loaded capital ratio above 13.4% and all banks reported a ratio above 11%, well above the regulatory requirements. 

    The EU weighted fully phased-in leverage ratio stood at 5.5% as of December 2019. The leverage ratio increased by 30 bps compared to the previous quarter, driven by rising capital and declining exposures. The lowest reported leverage ratio was 4.7% at country level and 1.6% at bank level. The asset quality of EU banks has been on an improving trend over the last few years. As of the fourth quarter of 2019, the EU weighted average nonperforming loan ratio declined to 2.7%, 20 bps lower than in the third quarter of 2019. The ratio in the fourth quarter of 2019 was the lowest since the EBA introduced a harmonized definition of nonperforming loans across European countries. Dispersion in the nonperforming loan ratio across countries remained wide, with few banks still reporting double-digit ratios, although in the last quarter the inter-quartile range compressed by 80 bps, to 3.1%.

    Earlier, EBA had postponed the EU-wide stress test exercise to 2021 to allow banks to focus on and ensure continuity of their core operations, including support for their customers. The Spring 2020 EU-wide transparency exercise comes as an exceptional disclosure in response to the outbreak of COVID-19. After postponing the EU-wide Stress Test to 2021, the Board of Supervisors agreed on an additional EU-wide transparency exercise to be carried out with the aim of providing updated information on bank exposures and asset quality to market participants. The transparency exercise is part of the ongoing efforts of EBA to foster transparency and market discipline in the EU financial market and complements banks’ own Pillar 3 disclosures, as laid down in the EU Capital Requirements Directive. Unlike stress tests, transparency exercises are purely disclosure exercises where only bank-by-bank data are published and no shocks are applied to the actual data. The Spring 2020 transparency exercise covers 127 banks from 27 European economic area countries and data is disclosed at the highest level of consolidation as of September 2019 and December 2019. The transparency exercise fully relies on supervisory reporting data.


    Related Links

    Keywords: Europe, EU, Banking, COVID-19, Spring 2020 Transparency Exercise, Transparency, Basel, Reporting, EBA

    Featured Experts
    Related Articles

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597