The European Central Bank (ECB), acting as the single supervisor in the euro area banking union, called on banking groups to increase their high-quality capital (CET1) on Tuesday 28 January when it presented the results of the SREP process for prudential supervision and assessment for 2019.
For the first time, the ECB sets out its capital requirements under the second pillar of European prudential rules. The range is between 0.75% for the Caisse de refinancement de l'habitat, held by the major French banks, and 3.5% for Ulster Bank.
“Overall, total CET1 capital requirements and guidance remain stable at 10.6%. This confirms a stabilisation of the prudential assessment of banks' capital requirements”, said Andrea Enria, Chair of the ECB's Prudential Supervisory Board.
SREP's 2019 financial year confirmed the decline in the volume of non-performing bank loans (NPLs), which represented a stock of 543 billion euros at end-September 2019 within the sample, i.e. a ratio of 3.4% (8% in 2014).
Mr Enria noted that the banks most concerned want “to reduce their NPL volumes by an additional 35% over the next two years”. This decrease mainly concerns old doubtful loans, “the most difficult to absorb or sell”.
See the results of the SREP 2019 process: http://bit.ly/2tNn5PC (Original version in French by Mathieu Bion)