AFME is pleased to share the Prudential Data Report for the second quarter of 2026. 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
The end-point CET1 ratio of European G-SIBs stood at 14.34% at the end of Q2 2026, 5 bps below the level observed in Q1 2026 (14.39%) and 3 bps above the level observed in Q2 2025.
The variation in CET1 ratio was primarily driven by retained earnings, contributing to a 52bps increase. This was partly offset by shareholder returns, which reduced the ratio by 31bps. Changes in RWA had a smaller effect, decreasing the ratio by 8bps, while FX translation and other factors provided a net contribution of 17bps.
TLAC capital covered 32.7% of RWAs and 9.5% of exposure measure.
The Liquidity Coverage Ratio of European GSIBs stood at 146.5% at the end of Q2 2026, representing a 46.5% buffer above the minimum requirement.
AT1 issuance reaches highest amount since 2014
During H1 2026, European banks issued a total of €28.5bn in AT1 capital, a significant increase from the previous year (€15.7bn in H1 2025). This was also a record half year since 2014.
The increase was driven by a broader tightening in spreads from the peak observed in early 2025, declining materially over the course of 2025 and stabilising at lower levels in H1 2026. While some short-term volatility persisted, spreads remained well below earlier highs, supporting favourable issuance conditions
Removing barriers to banking consolidation
The Box on page 22 discusses the relevance of banking consolidation in Europe, drawing on AFME's recent report, "Lifting Barriers to Banking Consolidation in Europe".
The report examines the economic rationale for consolidation, the barriers that continue to hinder it, and the policy reforms needed to support a more integrated and competitive EU banking sector.
The consequences of a cumbersome M&A are visible. Cross-border transactions often face lengthy approval processes, overlapping reviews and considerable execution uncertainty. Completing a banking merger in the Banking Union currently takes around 285 days on average, compared with 173 in the UK, and 144 days in the US.
