Risk Assessment Report Spring 2025 (European Banking Authority)

Summary

• The CET1 ratio stood at 16.1%, with CET1 capital matching the 5% increase in risk-weighted assets in 2024.p.12
• The volume of CET1 capital rose by around EUR 70 bn, primarily due to rising retained earnings and other reserves.p.12
• Dividend distributions and share repurchases reached EUR 92 billion in 2024.p.12
• This represents a payout ratio of 51% of year-end 2023 profits.p.12
• Geopolitical tensions are high and have triggered an increase in defence spending.p.11
• Rising tariffs may particularly affect sectors with significant export flows to the United States.p.11

Key insights

1. The nexus between sovereigns and banks has weakened compared to a decade ago.p.11
2. Banks have started to increase provisioning amid the deterioration in the geopolitical situation.p.12
3. Significant Risk Transfers have an increasing use as a capital management tool.p.12
4. Banks anticipate a further rise in planned dividends for 2025.p.12
5. The report includes a box on links between EU/EEA banks and digital assets.p.3