On June 4, 2015, the European Banking Authority (EBA) published its risk dashboard for the first quarter of 2015, summarizing the main risks and vulnerabilities in the banking sector, together with a press release.
The risk dashboard is based on data from the fourth quarter of 2014 and takes into consideration the evolution of a set of key risk indicators from 55 EU banks. It confirms, among other things, that:
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EU banks’ capital positions remained strong, with a common equity tier 1 (CET1) ratio of 12.1%. This is an increase of 50 basis points compared to 2013.
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The quality of banks’ loan portfolios remained weak but bottoming out.
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Profitability showed a mildly positive trend on a year over year comparison, but return on equity remained subdued and materially below banks’ average cost of equity.
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In 2014, at an EU level, deposits increased more than loans. The EU average loan‐to‐deposit ratio therefore decreased further in Q4 2014 to 108.6%, which is the lowest ratio since 2009.
The EBA risk dashboard is part of the regular risk assessment carried out by the EBA and complements the EBA’s risk assessment report.
