Brussels, 25/11/2015 (Agence Europe) - Exposure to non-performing bank loans is greater in small European banks, according to new data aiming to increase the transparency of the European banking sector, published on Tuesday 25 November by the European Banking Authority (EBA).
“Non-performing exposures are close to 6% of total loans and advances across the EU, 10% if only non-financial corporations are considered. Small banks are reporting aggregate ratios of non-performing loans of around 18%, medium-sized banks 9% and the largest banks 4%”, the European authority states.
Loans with arrears for at least three months are defined as non-performing loans. Disparities in this area remain considerable: dubious credit stands at 49.6% of loans in Cyprus, 28.4% in Slovenia and 21.5% in Ireland, but less than 1% in Sweden and 3.4% in Germany.
The data published related to 105 banking groups from 21 member states plus Norway and managing more than 67% of total European banking assets. According to the EBA, “European banks have continued to strengthen their capital positions, mainly through raising additional equity and retaining earnings”. For the panel of banks studied, the average level of optimum quality capital (CET1) was 12.8%. Small banks are better capitalised (more than 16%) than medium-sized banks (nearly 14%) and the large groups (12.5%). As for the average leverage ratio, this stands at 4.9%, a level which has moved a considerable distance towards the regulatory level to apply from 2018. (Original version in French by Mathieu Bion)