18 Dec 2018

Prudential Data Report 3Q 2018

This report collates timely information on EU GSIBs’ prudential capital, leverage and liquidity ratios with updated information as at 30 September 2018.

It also illustrates the recent performance of the debt and contingent convertibles (CoCo) markets and the funding structure for banks in Europe.

Among the main findings of this report:

  • The weighted average CET1, liquidity coverage ratio and leverage ratios for EU GSIBs slightly improved against the ratios reported in 2Q2018 but continued below the reported before the implementation of IFRS9 in 4Q2017.
  • EU GSIBs end-point CET1 ratio stood at 13.2% in 3Q 2018, above 13.1% in 2Q18. Earnings retention contributed 21bps to the CET1 ratio variation, while RWA reduction by 9 of the 12 EUGSIBs further contributed 6 bps to the quarterly increase in CET1. Other factors including FX variation partially offset the contribution of profit retention and RWA reduction (-11bps).
  • End-point Tier 1 ratios increased to 15.1% in 3Q 2018, from 14.8% in 2Q 2018.
  • End-point Leverage ratios (LR) stood unchanged from 2Q18 at 4.69%.
  • Liquidity Coverage Ratio (LCR) slightly improved at 146.6% on a weighted average basis in 3Q 2018, from 145.2% in 2Q 2018.
  • New GSIB list: The FSB updated on Nov-18 the list of globally systemically important banks. One EU bank was added to the list and two EU banks have been removed from the list. With these changes, the overall number of GSIBs decreased from 30 to 29 and the number of EU GSIBs decreased from 12 to 11.
  • Box: Political agreement reached on the Risk Reduction Measures package: On 13 Dec 2018, EU finance ministers announced that a political agreement has been reached on the Risk Reduction Measures (RRM) package on key prudential and resolution issues. The agreement represents an important step towards reducing risks in the banking system and avoiding national taxpayer funded bailouts. However, significant barriers remain to be addressed and some elements of the agreement may generate further fragmentation.