This report collates timely information on EU GSIBs’ prudential capital, leverage and liquidity ratios with updated statistics as at 31 December 2019.

It also illustrates the recent performance of the debt and contingent convertibles (CoCo) markets and the funding structure for banks in Europe as of end of March 2020. 

Among the main findings of this report:

• EU systemically important banks* (EU GSIBs) reported in 4Q19 the highest quarterly solvency ratios in records (since our records began in 2013).
   
• Amidst the current COVID-19 global pandemic, European banks are significantly well positioned from a solvency and liquidity perspective to continue to support the economy and facilitate risk management. European banks have consistently built up their capital and liquidity buffers over the last years through a combination of internal restructuring, profit generation and external capital raising.
   
• EU GSIBs end-point CET1 ratio increased to 13.6% in 4Q19, from 13.1% in 4Q18.
   
• End-point Tier 1 ratios increased to 15.3% in 4Q19, from 14.8% in 4Q18. 
   
• End-point Leverage ratios (LR) increased to 4.9% in 4Q19 from 4.8% in 4Q18.
   
• Liquidity Coverage Ratio (LCR) declined to 140.4% on a weighted average basis in 4Q19, from 141.3% in 4Q18.
   
• TLAC ratio stood at 26.1% relative to RWAs and 8.4% as a percentage of leverage exposure.
   
• The amount of new capital raised during 2019 by EU banks totalled €28.1 bn, €4bn above the amount raised in 2018.
  
  The amount of fresh capital raised was almost exclusively in the form of contingent convertible (CoCo) bonds.
  
  CoCo risk premia (option-adjusted spreads) has increased by 365bps in 2020YtD, from record lows observed during the first two months of the year. Markets are likely pricing the potential repercussions COVID-19 on banks’ future earnings.
  
  The increase in CoCo spreads was mirrored by a sudden stop in CoCo issuance by European banks.
   
• BOX: Pages 22-29 provide an overview of the most recent COVID-19 regulatory decisions in Markets and Prudential dossiers and AFME responses where relevant.
  
  COVID-19 has had significant implications for AFME members globally with many having to focus resources on managing business continuity issues.
  
  AFME is working with official sector authorities to ensure that its members can continue to support their clients during these challenging times.