Introduction

This report describes the main developments and trends in the EU/EEA banking sector and provides the EBA outlook on the related main risks and vulnerabilities[1]. The RAR is based on qualitative and quantitative information collected by the EBA. The report’s key data sources are the following:

  • EU/EEA supervisory reporting[2];
  • the EBA RAQ addressed to banks;
  • market intelligence as well as qualitative micro prudential information.

This report follows the common structure of the EBA’s RARs. It is furthermore complemented by two focus topics, covering AI developments and relevant risks for the banking sector, and retail risk indicators. The RAR builds on the supervisory reporting data that competent authorities submit to the EBA on a quarterly basis for a sample of 162 banks from 30 EEA countries (130 banks at the highest EU/EEA level of consolidation from 26 countries[3]). Based on total assets, the sample covers more than 80% of the EU/EEA banking sector. In general, the risk indicators and other supervisory-reporting-based charts and analysis are based on an unbalanced sample of banks, whereas charts related to the risk indicator numerator and denominator trends are based on a balanced sample[4]. When referring to countries in the following, respective data is based on the sample of banks applicable for this jurisdiction (see Annex I) if not otherwise stated. The data related to MREL in this report is based on reporting on MREL and TLAC, which covers a sample of 339 resolution entities or groups[5]. In selected cases, some of the analysis covered in this RAR is based on data from other reporting and data submissions, such as the EBA’s EuReCA[6].

The RAQ is conducted by the EBA on a semi-annual basis[7]. Answers to the questionnaires were provided by 85 European banks (Annex I) during August and September 2024. The report also analyses information gathered by the EBA from informal discussions as part of the regular risk assessments and ongoing dialogue on risks and vulnerabilities of the EU/EEA banking sector. The cut-off date for the market data presented in the RAR was 15 October 2024, unless otherwise indicated.

Along with the RAR, the EBA is disclosing bank-by-bank data as part of the 2024 EU-wide transparency exercise for four reference dates (September 2023, December 2023, March 2024 and June 2024). The transparency exercise is part of the EBA’s ongoing efforts to foster transparency and market discipline in the EU internal market for financial services, and complements banks’ own Pillar 3 disclosures, as set out in the EU’s CRD. The sample in the 2024 transparency exercise includes 123 banks from 26 countries at the highest level of consolidation in the EU/EEA as of June 2024[8]. The EU-wide transparency exercise relies entirely on COREP / FINREP data.

 

Abbreviations and acronyms

[1] With this report, the EBA discharges its responsibility to monitor and assess market developments and provides information to other EU institutions and the general public, pursuant to Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority) and amended by Regulation (EU) No 1022/2013 of the European Parliament and of the Council of 22 October 2013.

[3] Data as of the reporting date 31 June 2024. Supervisory reporting includes, for instance, prudential reporting (COREP), FINREP. It needs to be noted that there are partially certain differences between reporting samples (on the sample of reporting banks see Annex I) and reporting requirements, such as in the level of consolidation.

[4] Being an unbalanced sample, the number of reporting banks per country may display minor variations between quarters, which might accordingly affect quarterly changes in absolute and relative figures and therefore changes in risk indicators for country-level aggregates must be read with caution.

[5] Number of banks for which the EBA has received both an MREL decision and MREL resources.

[6] The EBA’s EuReCA is a central database that puts together information submitted by competent authorities on serious deficiencies in individual financial institutions’ systems and controls that expose these institutions to ML/TF risk. Data refers to all sectors within the remit of the EBA’s AML/CFT mandate, namely: credit institutions, payment institutions, e-money institutions, bureaux de change, investment firms, fund managers, credit providers (other than credit institutions), life insurance undertakings and life insurance intermediaries, and an additional category of ‘others’.

[7] The results of the RAQ are also published separately, on a semi-annual basis. These published RAQ booklets (see results of RAQ autumn 2024 here) which also include explanations of the questionnaire and the analysis of the RAQ responses.

[8] The figures for the banks not participating in the EU transparency exercise are disclosed in an aggregate manner and at the highest level of consolidation in the category ‘Other banks’. This is to allow users to reconcile with the EBA’s full population of EU/EEA largest institutions.