Brussels, 13/10/2014 (Agence Europe) - European banks are relying increasingly heavily on deposits to finance their activities, according to a report on structural changes in the euro area banking sector, which was published by the ECB on Monday 13 October.
“The gradual shift to deposit funding continued in 2013 with the median share of customer deposits in liabilities rising to 52%”, the ECB report states. At the same time, bank reliance on wholesale funding has fallen further, with the median share falling from 36% to 23% in 2013. The Eurozone banks have also reduced their reliance on cash injection from the ECB, as they are gradually repaying loans taken out in the framework of the 'LTRO' operation.
The total assets managed by the 5,948 European banks continued to fall in 2013, from €33,500 billion in 2008 to €26,800 billion in 2013. Half of this drop in the scale of the banking sector can be attributed to the major banks' lesser exposure to derivative financial products.
The profitability of the banks in the Eurozone continues to be a challenge, due to low interest rates and a fall in the quality of assets, although no sector at national level has reported deadweight losses.
Lastly, the banks continue to consolidate their own banking funds by means of capital increases and cutting the proportion of risk-adjusted assets. In 2013, the average capital ratios (CET 1) rose from 12.1% in 2012 to 13% in 2013. (MB)