The European Banking Authority published its Q1 2025 Risk Dashboard, presenting aggregated supervisory statistics for the largest EU/EEA credit institutions and indicating that the sector remains robust, with stable capitalisation and broadly steady profitability despite an increase in the cost of risk. The common equity tier 1 ratio held at 16.2% on total risk-weighted assets of EUR 9.9 trillion, with operational risk rising to 12.9% of RWAs. Total assets increased 2.7% quarter on quarter to EUR 29 trillion, driven mainly by higher holdings of debt securities (14.6% of assets versus 13.7% in Q4 2024) and a slight increase in cash balances (10.9% of assets), while customer loans grew by close to 1% led by household mortgages and small and medium-sized enterprise lending. Non-performing loans were stable at EUR 377.8 billion and stage 2 loans edged up but fell 20 basis points as a share of total loans to 9.5%, even as the cost of risk increased to 57 basis points, above the post-2021 average of around 48 basis points. Return on equity was 10.5% (10 basis points lower year on year) and return on assets remained 0.73%, with net interest margin declining 5 basis points quarter on quarter to 1.6% and net interest income down 1.3% year on year, offset by asset growth and a 6% increase in net fee and commission income. Liquidity metrics eased, with the liquidity coverage ratio at 159.5% and the net stable funding ratio at 126.9%, while the household and non-financial corporate loan-to-deposit ratio rose to 106.3% as those deposits fell 0.5% over the quarter and other customer deposits, including from non-bank financial institutions, increased 9.4% to 12.7% of total liabilities; COREP data in the dashboard excludes Iceland, Liechtenstein and Norway due to the implementation of CRR3.

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