AFME Q3 2025 Prudential Data Report

AFME is pleased to share the Prudential Data Report for the third quarter of 2025. The report provides updated data on European G-SIBs’ prudential capital, leverage, and liquidity positions, and illustrates the performance of banks’ debt and contingent convertible (CoCo) securities.

 

Among the main findings of this report:

Capital and liquidity buffers remain strong

1. The CET1 ratio of European G-SIBs stood at 14.4% in Q3 2025, c. 10bps above the levels observed last quarter, driven by strong earnings retention.
2. The leverage ratio reached 4.37% in Q3 2025, a slight increase from 4.36% in Q2 2025.
3. Liquidity coverage ratios stayed well above regulatory minimums, at 149% on average.
4. TLAC ratios remained well above minimum regulatory requirements across all institutions, at 32% of RWAs and 9.4% relative to exposure measure.

 

AT1 issuance surpassed 2024FY and 2023FY volume 

1. During Q3 2025, European banks issued a total of €8.22bn in AT1 capital, a slight increase from the previous quarter (€8.15bn) and a 5.9% YoY decrease.
2. On a year-to-date basis, AT1 issuance already surpassed the issued amount of 2024FY and 2023FY, driven by lower market spreads which reached levels not seen since 2019.

 

Global review of prudential requirements (Analytical Box, page 22)

1. Regulators in the EU, US, UK, and Australia are advancing initiatives to simplify prudential frameworks, including streamlining capital stacks, revising how stress tests influence capital surcharges, and recalibrating optimal capital ratios.
2. In the UK, the Bank of England’s FPC has reduced its T1 capital benchmark from 14% to 13% of RWAs.
3. In the EU, the ECB in the context of its simplification task force, has proposed: i) reducing the number of capital stack elements; ii) revising the role and design of AT1 and T2 instruments; and iii) aligning MREL and TLAC frameworks.
4. The ECB has a preference for a capital‑neutral approach, even though Eurozone banks currently have the highest risk-based T1 capital ratio among major banking jurisdictions.
5. AFME and its members are actively contributing to the European policy discussion and will undertake more detailed work in the upcoming weeks which will lead to the development of further alternative suggestions around simplification at the European level.