BANCI | Noutati EBA

EBA Risk Dashboard confirms steady improvements in the EU banking sector but banks profitability and business model sustainability remain key challenges

Trimite stirea unui prieten
Nume *
E-mail *
E-mail prieten *
Mesaj
Cod validare * Turing Number
Tastati codul din imagine (doar cifre)
195.154.184.126

Autor: Bancherul.ro
2018-01-16 23:41

The European Banking Authority (EBA) published today its regular Risk Dashboard. Using quantitative risk indicators, along with the opinions of banks and market analysts from its Risk Assessment Questionnaire, the EBA´s dashboard identified ongoing improvements in the repair of the EU banking sector but also residual risks in NPLs and profitability.

In the third quarter of 2017, EU banks´ continued to strengthen their capital ratios. The CET1 ratio experienced an increase of 30 bps, from 14.3% in Q2 2017 to 14.6% in Q3 2017. This growth was jointly driven by an increase in CET1 capital and decrease in the total risk exposures amount, mostly for credit risk. Compared to the previous quarter, the fully loaded CET1 ratio also increased by 30 bps to 14.3%.

The ratio of non-performing loans (NPLs) kept a modest downward trend, decreasing by 30 bps to 4.2%, and suggesting that, although slowly, supervisory efforts are bearing their fruit. However, the results of the EBA Risk Assessment Questionnaire suggest that major impediments to the resolution of NPLs remain, such as lengthy and expensive judiciary processes and the lack of liquidity in secondary NPL markets. In this respect, the recently published EBA NPL transaction templates are a first contribution to widen the investors´ base and reduce asymmetric information in the secondary market.

Profitability indicators have improved slightly but sustainable returns remain elusive for many banks. On a year-on-year comparison, the average ROE rose by 1.7 percentage points (pp) to 7.1% in Q3 2017, mainly driven by the annual increase in net trading income (8.9% in Q3 2017). Nevertheless, the widespread dispersion among countries (with the ROE ranging from -20.0% to 18.1%), along with high operating costs, continues to dampen profitability prospects for the European banking sector as a whole. Also the results of the EBA Risk Assessment Questionnaire show that banks´ profitability remains a concern, even though banks, as well as market analysts, expect a slight improvement in the near future.

The loan-to-deposit ratio continued to decrease, reaching 117.2% with a 30 bps decline from the previous quarter. The leverage ratio remained broadly stable, increasing 10 bps from 5.3% (Q2 2017) to 5.4% (Q3 2017). In September 2017, the average liquidity coverage ratio (LCR) was 144.6%, well above the threshold defined as the liquidity coverage requirement for 2017 (80%). Regarding the future of EU banks´ funding, the results of the EBA Risk Assessment Questionnaire suggest that banks are expected to attain more instruments eligible for MREL, even though they consider the uncertainty on the specific MREL requirements as a constraint to their issuance.

The results of the Risk Assessment Questionnaire also show that cyber risk and data security are considered as the main drivers for the increase in operational risk. They are also assumed to be the main factors that might negatively influence market sentiment, along with the uncertainties around the UK´s decision to leave the EU.

Comentarii



Adauga un comentariu
Nume *:

E-mail *:
(nu se afiseaza pe site)
Subiect:
*
Comentariu:

Turing Number

Tastati codul din imagine (doar cifre)  



Adauga un comentariu folosind contul de Facebook

Alte stiri din categoria: Noutati EBA



EBA issues first binding mediation decision between the SRB and the NBR

The European Banking Authority (EBA) publishes today its first binding mediation decisions between two resolution authorities, the Single Resolution Board (SRB) and the National Bank of Romania (NBR). The decisions were issued following a request from the NBR for the EBA to assist in settling a detalii

Asset repricing, cyber-attacks and Brexit are key risks for EU financial markets, shows ESA report

The securities, banking and insurance sectors in the European Union (EU) face multiple risks, the latest report on risks and vulnerabilities by the Joint Committee of the European Supervisory Authorities (ESAs) shows. detalii

EBA publishes its Roadmap on FinTech

The European Banking Authority (EBA) published a FinTech Roadmap setting out its priorities for 2018/2019. The Roadmap also sets out the establishment of a FinTech Knowledge Hub to enhance knowledge sharing and foster technological neutrality in regulatory and supervisory approaches.
detalii

EBA launches 2018 EU-wide stress test exercise

The European Banking Authority (EBA) launched today its 2018 EU-wide stress test and released the macroeconomic scenarios, said EBA in a statement. The adverse scenario implies a deviation of EU GDP from its baseline level by 8.3% in 2020, resulting in the most severe scenario to date. detalii