11 January 2023
- Aggregate Common Equity Tier 1 capital ratio to 14.74% in Q3 2022 (compared to 14.97% in the prior quarter and 15.47% in the same quarter of 2021)
- Aggregate annualized return on stable capital at 7.55% in the third quarter of 2022 (compared to 7.59% in the prior quarter and 7.19% in the same quarter of 2021)
- The aggregate NPL ratio (excluding cash balances) fell again to 2.29%, from 2.35% in the previous quarter, while loans showing significantly increased credit risk (phase 2 loans) they continued to grow slightly, standing at 9.79% (compared to 2.35% in the previous quarter). 9.72% in the previous quarter)
The aggregate capital ratios of significant institutions (i.e. those banks directly supervised by the ECB) decreased in the third quarter of 2022. The aggregate Common Equity Tier 1 (CET1) ratio stood at 14.74 %, the aggregate Tier 1 capital ratio at 16.03%. % and the aggregate total capital ratio stands at 18.68%. Aggregate CET1 ratios at the country level ranged from 12.48% in Spain to 24.06% in Estonia. In the Single Supervisory Mechanism business model categories, diversified lenders reported the lowest aggregate CET1 ratio (13.74%) and promotion/development lenders reported the highest (31.00%).
Capital ratios and their components by reference period
Capital ratios by country of origin for the third quarter of 2022
Capital ratios by business model as of the third quarter of 2022
The non-performing loan (NPL) ratio excluding cash balances at central banks and other demand deposits decreased to 2.29% in the third quarter of 2022. €351 billion in the previous quarter), as well as a increase in total loans and advances (excluding cash balances) to €15,201 billion (compared to €14,962 billion in the previous quarter).
At the country level, the average NPL ratio, excluding cash balances (green bars in Chart 5), ranged from 0.85% in Estonia to 7.50% in Cyprus. Across all business model categories, custodians and asset managers reported the lowest aggregate delinquency rate excluding cash balances (0.62%) and diversified lenders reported the highest (3.40%).
Aggregate Stage 2 loans as a percentage of total loans continued to increase slightly in the third quarter of 2022, reaching 9.79% (versus 9.72% in the previous quarter). The stock of phase 2 loans amounted to €1,434 billion (compared to €1,399 billion in the previous quarter).
The cost of risk stood at an aggregate level of 0.48% in the third quarter of 2022 (compared to 0.52% in the previous quarter). At significant institutions, the interquartile range narrowed further to 0.52 percentage points (down from 0.56 percentage points in the previous quarter).
Loans in arrears by reference period
NPL ratio by country of origin for the third quarter of 2022
NPL ratio by business model as of the third quarter of 2022
Loans and advances subject to impairment review per reference period
Cost of risk by reference period
Return on equity
Aggregate annualized return on capital held steady at 7.55% in the third quarter of 2022 (compared to 7.59% in the prior quarter). Higher interest income was a key driver of profitability compared to the prior quarter (2.5 billion euro increase) and the same quarter of 2021 (17.9 billion euro increase).
SIs in Slovenia showed the highest aggregate annualized return on equity in Q3 2022 (18.80%), while SIs in Malta showed the lowest (-1.36%). Across the Single Supervisory Mechanism business model categories, the aggregate annualized return on equity ranged from 9.97% for small market lenders to 2.84% for corporate/wholesale lenders.
Return on equity and composition of net gains and losses by reference period
Return on capital by country of origin for the third quarter of 2022
Return on capital by business model for the third quarter of 2022
Liquidity and financing
The aggregate liquidity coverage ratio stood at 162.03% in the third quarter of 2022, compared to 164.38% in the previous quarter. Both the liquidity buffer and the net liquidity outflow increased compared to the previous quarter (€160 billion and €144 billion, respectively).
Liquidity coverage ratio and its components by reference period
Loans and advances subject to measures related to COVID-19
In the third quarter of 2022, total outstanding loans and advances subject to COVID-19 related measures decreased again to €388 billion, compared to €409 billion in the previous quarter. The decline was driven by newly created loans and advances subject to public guarantee schemes, which fell to €345bn from €360bn in the previous quarter.
Loans and advances subject to measures related to COVID-19 by reference period
Factors Affecting Changes
Supervisory banking statistics are calculated by aggregating data reported by banks reporting COREP (capital adequacy information) and FINREP (financial information) at the relevant time. Consequently, changes from one quarter to another may be influenced by the following factors:
- changes in the sample of reporting institutions;
- fusions and acquisitions;
- reclassifications (for example, portfolio changes as a result of the reclassification of certain assets from one accounting portfolio to another).
For media inquiries, please contact Philip Rispalphone: +49 69 1344 5482.
- The full set of supervisory banking statistics with additional quantitative risk indicators is available on the ECB’s banking supervision website.