The European Banking Authority (EBA) has published a report on the outcome of its 2015 EU-wide transparency exercise.

The report provides a detailed bank-by-bank data on capital positions, risk exposure amounts and asset quality on 105 banks from 21 EEA countries as part of its ongoing commitment to enhancing transparency in the EU banking sector.

Among other things the report notes that:

  • in general, EU banks have continued to strengthen their capital positions, mainly through raising additional equity and retaining earnings. This process has led to aggregate improvements in the common equity tier 1 (CET1) ratio, T1 ratio and total capital ratio (12.8%, 14.0% and 16.7% respectively, as of June 2015), all of which are above legal minima and compare favourably with levels in large banks globally;
  • the fully loaded Capital Requirements Directive IV / Capital Requirements Regulation CET1 ratio reached 12%;
  • leverage ratios have benefited from capital improvements in recent years. The current aggregate leverage ratio is 4.9%, progressing towards meeting the requirements that will come into force in 2018; and
  • in terms of profitability, EU banks aggregate return on equity materially improved during the first half of 2015 (from 4.65% return on regulatory capital as of December 2014 to 9.1% as of June 2015), mainly driven by larger net income coming from trading activities and lower impairments, and partially explained by the seasonality of impairments.

View EU banks better capitalised in 2015, but NPLs remain of concern, 24 November 2015