EBA欧洲银行-2017-EU-wide-Transparency-Exercise-Press-Release_2页_376kb

EBA Report Summary: EU Banking Sector Resilience and Challenges (2017)

Core Content

The European Banking Authority (EBA) released its tenth report on risks and vulnerabilities in the EU banking sector, alongside the 2017 EU-wide transparency exercise. This report highlights the resilience of the EU banking sector amidst a stable macroeconomic and financial environment, while also identifying ongoing challenges that require attention.

Main Points and Key Findings

Sector Resilience

• The EU banking sector has shown continued improvement in solvency, asset quality, and profitability.
• Capital ratios have increased, with the CET1 ratio (transitional) reaching 14.3% in Q2 2017, up by 70 bps from Q2 2016.
• The fully-loaded CET1 ratio also improved to 14.0%.
• NPL ratio dropped from 5.4% in Q2 2016 to 4.5% in Q2 2017, indicating progress in balance sheet cleanup.

Persistent Challenges

• Non-performing loans (NPLs) remain a significant issue, with one-third of EU jurisdictions reporting NPL ratios above 10%.
• The total level of NPLs is still at a very high historical level, amounting to EUR 893 billion.
• Long-term profitability continues to be a challenge, especially in a low interest rate environment and with flat yield curves.
• Profitability improvements have been driven by reduced impairments, increased fees and commissions, and higher trading profits.
• Return on equity (RoE) reached 7.0% in Q2 2017, the highest since 2014, but remains below the cost of equity in many cases.

Asset Quality and Funding

• The EU area coverage ratio increased to 45%, though dispersion across countries is still notable.
• Total assets of EU banks decreased by 6.3% between Q2 2016 and Q2 2017, primarily due to reduced derivatives exposures and debt securities.
• Loans volume has continued to grow, showing an increasing trend in lending activity.

Funding Market Trends

• Bank funding markets have been stable with low volatility in the first three quarters of 2017.
• Accommodative monetary policies and central banks' asset purchase programs have supported low funding costs.
• However, issuance volumes of unsecured and secured debt decreased compared to 2016.

IT Security and Operational Risks

• The EU banking sector faces new and high risks, with cyber and data security being among the most challenging.
• Cyberattacks have become more frequent and sophisticated, posing a serious threat.
• Banks have increasingly relied on IT platforms, leading to greater dependence on third-party service providers for IT services and data management.

Key Information

• The transparency exercise includes data from 132 banks across 25 EEA countries.
• Data is disclosed at the highest level of consolidation as of December 2016 and June 2017.
• The EBA provides interactive tools for users to compare and visualize the data at the country and bank level.
• Unlike stress tests, the transparency exercise is a pure disclosure exercise, without applying any shocks to the data.

Conclusion

While the EU banking sector has demonstrated resilience and improvement in key areas, NPLs, IT security, and long-term profitability remain critical challenges. The EBA continues to promote transparency and market discipline through its annual transparency exercises and provides tools for data analysis and comparative insights.