European Central Bank Banking Supervision published supervisory banking statistics for significant institutions for the first quarter of 2026 showing weaker aggregate capital and funding positions, stable asset quality and higher profitability. The Common Equity Tier 1 ratio fell to 15.99% from 16.26% in the previous quarter, the liquidity coverage ratio fell to 153.93% from 158.60%, and the net stable funding ratio declined to 125.63%, its lowest level since the series began in 2021. At the same time, annualised return on equity rose to 10.02% from 9.52%, while the non-performing loans ratio excluding cash balances remained unchanged quarter on quarter at 2.18% and was lower than a year earlier. The aggregate Tier 1 ratio and total capital ratio also declined, to 17.51% and 20.11% respectively. The stock of non-performing loans increased by EUR 7.92 billion as total loans and advances rose by EUR 424.48 billion, leaving the headline ratio unchanged. Stage 2 loans fell to 9.29% of total loans from 9.33% in the previous quarter. The drop in the liquidity coverage ratio was driven mainly by a EUR 128 billion increase in net liquidity outflows, while the fall in the net stable funding ratio reflected a EUR 185 billion increase in required stable funding. The statistics now also include a new breakdown of the liquidity buffer, providing more detail on the composition of Level 1 assets.

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