The European Banking Authority presented on Monday 8 June new data on the robustness of the banking sector based on a snapshot taken 31 December 2019 to shed some light on its ability to withstand the economic crisis caused by the Covid-19 pandemic.
Applying the new prudential banking rules that have been provisionally implemented, the average fully loaded capital ratio (Tier 1) stood at 14.8% in the fourth quarter of 2019. Nearly three-quarters of the banks in the panel examined reported a ratio above 13.4% and all the banks examined reported a ratio above 11%.
Such data is “well above” regulatory requirements, the European authority said in a statement.
At the end of December 2019, the average leverage ratio for the panel of banks was 5.5%. The lowest reported leverage ratio was 4.7% at the country level and 1.6% at the bank level.
In addition, the average level of ‘non-performing loans’ (NPLs) decreased to 2.7%, 20 percentage points lower than in the previous quarter. According to the European Banking Authority, this is the lowest level recorded since the introduction of the harmonised definition of NPLs. But there are still wide differences in this area.
More info at: https://bit.ly/3h9wsfY (Original version in French by Mathieu Bion)