Publishing its quarterly scoreboard on the risks inherent to the banking sector in 2017, on Thursday 5 April, the European Banking Authority (EBA) welcomed the positive progress of the European banks, particularly in reducing their exposure to non-performing loans (NPL).
On the basis of data from the fourth quarter of 2017 from 149 credit institutions, this scoreboard shows that the average NPL ratio has continued its downward trend, standing at 4%, compared to 4.2% in the third quarter (see EUROPE 11942). This is its lowest level since 2014.
However, the EBA remains concerned by the persistent gaps between member states, with ratios ranging between 0.7% in Luxembourg to 44.9% in Greece, and by the still high level of NPL on banks' balance sheets, which has been estimated at €813 billion.
“Activity on the secondary NPL market shows some positive signs but is still limited due to structural impediments, suggesting that efforts in this respect have to continue”, the EBA added, in reference to the recent measures proposed by the European Commission in this area (see EUROPE 11981).
The Authority also highlights the continued increase in bank equity, the CET1 ratio having risen from 14.6% in the third quarter to 14.8% in the fourth quarter of 2014, reaching its highest level since the fourth quarter of 2014. (Original version in French by Marion Fontana)