EBA Risk Dashboard Shows That Capital And Liquidity Ratios Remain Robust

The European Banking Authority (EBA) today published its quarterly Risk Dashboard together with the results of the autumn edition of the Risk Assessment Questionnaire (RAQ).

• Overall, banks maintain robust capital and liquidity ratios.
• The average Common Equity Tier 1 (CET1) ratio declined slightly to 14.8% from 15% in the previous quarter on a fully loaded basis.
• The average Liquidity Coverage Ratio (LCR) reached 162.5% (164.9% in Q2 2022) while the average Net Stable Funding Ratio (NSFR) remained at 126.9%.
• The non-performing loan (NPL) ratio declined slightly to just below 1.8%. However, banks’ asset quality expectations have further deteriorated, notably for SME and consumer finance.
• Average return on equity (RoE) remains stable supported by increases in net interest income
• Banks and analysts remain optimistic about profitability prospects.
• EU Taxonomy used by banks engaged in green lending

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