EBA Publishes Outcome of 2013 EU-wide Transparency Exercise


As recently reported by the Malta Financial Services Authority (MFSA), The European Banking Authority (EBA) has published information on 64 European banks from 21 countries of the European Economic Area (EEA). The data covers the first half of 2013 and is based on 730,000 data points including capital, Risk Weighted Assets (RWAs) and sovereign exposures. The EBA aims to promote greater understanding of capital positions and exposures of EU banks, thus contributing to market discipline and financial stability in the EU.

The data released by the EBA showed a continued positive trend in EU banks’ capital position: Core Tier 1 (CT1) increased by more than €80bn between December 2011 and June 2013; combined with a reduction of €817bn in RWAs, this led to an improvement of the CT1 ratio by 170 bp, from 10% to 11.7%. In addition, total net sovereign exposures towards EEA countries declined by about 9% during 2011, but increased afterwards by 9.3%. Half of the sovereign exposures are held in the available for sale portfolios. The share of bonds issued by sovereigns under stress held by domestic banks has increased markedly between December 2010 and June 2013.

Exposures at default showed a modest reduction (-3% between December 2012 and June 2013). EU banks are mainly exposed towards corporates (32%), retail (31%) and sovereigns (19%). The distribution of exposures across asset classes is stable over time. The ratio of total defaulted assets to total exposure is 3.8%; corporate and retail portfolios display the highest ratios – 6.9% and 4.2% respectively.