Introduction

This report describes the main developments and trends in the EU/EEA banking sector and provides the EBA outlook on the related main risks and vulnerabilities[2]. The Risk Assessment Report (RAR) is based on qualitative and quantitative information collected by the EBA. The report’s key data sources are the following:

  • EU/EEA supervisory reporting[3];
  • the EBA Risk Assessment Questionnaire (RAQ) addressed to banks;
  • market intelligence, as well as qualitative micro-prudential information.

This report follows the common structure of the EBA’s RARs. The RAR builds on the supervisory reporting data that competent authorities submit to the EBA on a quarterly basis, for a sample of 161 banks from 30 EEA countries (129 banks at the highest EU/EEA level of consolidation from 26 countries)[4]. Based on total assets, the sample covers more than 80% of the EU/EEA banking sector. In general, the risk indicators and other supervisory reporting-based charts and analysis are based on an unbalanced sample of banks, whereas charts related to the risk indicator numerator and denominator trends are based on a balanced sample[5]. When referring to countries in the following, the respective data are based on the sample of banks applicable for this jurisdiction (see Annex I), if not otherwise stated. The data related to the minimum requirement for own funds and eligible liabilities (MREL) in this report are based on reporting on MREL and total loss absorbing capacity (TLAC), which covers a sample of 339 resolution entities or groups[6]. The analysis in Chapters on Liquidity positions and NSFR and Deep dive on selected liquidity related considerations replaces the qualitative and quantitative parts of the EBA’s LCR and NSFR monitoring, which was previously published separately[7]. The text and figures in this report refer to weighted average ratios unless otherwise indicated[8]. In selected cases, some of the analysis covered in this RAR is based on data from other reporting and data submissions, such as the EBA’s European reporting system for material CFT/AML weaknesses (EuReCA)[9].

The RAQ is conducted by the EBA on a semi-annual basis, with one questionnaire addressed to banks[10]. Answers to the questionnaires were provided by 85 European banks (Annex I) during February and March 2025. The report also analyses information gathered by the EBA from informal discussions as part of the regular risk assessments and ongoing dialogue on risks and vulnerabilities of the EU/EEA banking sector. The cut-off date for the market data presented in the RAR was 31 May 2025, unless otherwise indicated.

It must be noted that the forecasts based on funding plan data in this report – namely in the asset, liability and profitability chapters – are based on banks’ expectations as of YE 2024. As such, they do not reflect the latest (geo)political and financial market developments. However, it is presumably safe to assume that they had nevertheless been drafted taking into account (geo)political and economic uncertainty at that time.

 


 

[2] With this report, the EBA discharges its responsibility to monitor and assess market developments and provides information to other EU institutions and the general public, pursuant to Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority) and amended by Regulation (EU) No 1022/2013 of the European Parliament and of the Council of 22 October 2013. With the analysis in this report, the EBA discharges its responsibility to coordinate the assessment of funding plans at Union level, including credit institutions’ plans to reduce reliance on public sector funding sources, and to assess the viability of such plans for the Union banking system, on an aggregated basis, set out in Recommendation A of the ESRB recommendation on funding of credit institutions from 20 December 2012 (ESRB/2012/2). With this analysis, the EBA also discharges its responsibility to closely monitor the level, evolution and types of asset encumbrance as well as unencumbered but encumberable assets at Union level, as described in Recommendation C of the European Systemic Risk Board (ESRB) recommendation on funding of credit institutions from 20 December 2012 (ESRB/2012/2).

[4] Data as of the reporting date 31 December 2024 if not otherwise indicated. Supervisory reporting includes, for instance, prudential reporting (common reporting – COREP), financial reporting (FINREP), as well as reporting on funding plan data. It must be noted that there are, partially, certain differences between reporting samples (on the sample of reporting banks, see Annex I) and reporting requirements, such as in the level of consolidation. The funding plan data are based on projections as of December 2024. See also the EBA’s Guidelines on funding plan reporting. In funding plan data-based figures “A” stands for “actual” numbers, “F” for forecasted numbers. On the indicators used, see the EBA’s methodological guide on EBA indicators for risk assessment and resolution..

[5] Being an unbalanced sample, the number of reporting banks per country may sometimes display certain variations between quarters, which might accordingly affect quarterly changes in absolute and relative figures and therefore changes in risk indicators for country-level aggregates must be read with caution.

[6] Number of banks for which the EBA has received both an MREL decision from resolution authorities and information on MREL/TLAC resources.

[7] The separately published 2025 edition of the EBA’s LCR and NSFR monitoring report covers regulatory considerations. See also previously published monitoring reports in 2019, 2021 and 2023.

[8] There might be slight differences between some of the risk indicators covered in the Q4 2024 version of the EBA Risk Dashboard and this report, as a result of data resubmissions by banks. The Annex to the Risk Dashboard also includes a description of the risk indicators covered in this report and their calculations, and further descriptions are available in the EBA’s guide to risk indicators.

[9] The EBA’s EuReCA is a central database that puts together information submitted by competent authorities on serious deficiencies in individual financial institutions’ systems and controls that expose these institutions to money laundering and terrorist financing (ML/TF) risk. Data refers to all sectors within the remit of the EBA’s anti-money laundering/countering the financing of terrorism (AML/CFT) mandate, namely: credit institutions, payment institutions, e-money institutions, bureaux de change, investment firms, fund managers, credit providers (other than credit institutions), life insurance undertakings and life insurance intermediaries, and an additional category of ‘others’.

[10] The results of the RAQ are also published separately, on a semi-annual basis. These published RAQ booklets (latest published version is from spring 2025) also include explanations of the questionnaire and the analysis of the RAQ responses.