1 Dec 2015

Prudential Data Report: EU GSIBs Prudential Capital - Q3 2015


European systemically important banks (or EU-GSIBs1.) continue improving their capital and leverage positions during 3Q15, in compliance with CRDIV.

The CRDIV rules comprise minimum requirements on capital adequacy, liquidity and leverage positions, which seek to enhance the soundness of bank’s balance sheets.

Among the main findings of this report are:

  • EU GSIBs increased their end-point Common Equity Tier 1 Capital ratio (CET1 ratio) to 11.5% in 3Q15, from 11.4% in 2Q15 and 10% in 4Q13.
  • End-point Tier 1 ratios increased in the third quarter of the year to 12.7%, from 12.5% in 2Q15 and 10.7% in 4Q13.
  • Leverage ratios also continue improving in 3Q15, with a simple average ratio of 4.6% in 3Q15 calculated on an end-point basis, from 4.5% in 2Q15 and 3.8% in 4Q13.
  • The findings of this report are consistent with the observed increase in aggregate capital raising since 2009 (see graph in left panel). Since the 2009 crisis, EU banks have raised around €318bn in fresh capital from the markets, of which €254bn is in equity and €64bn in CoCos and other convertible debt (in total about 2.3% of EU28 GDP at current prices). This estimate, however, does not take into account capital raised through internal generation (retained earnings) and balance sheet restructuring.