Banking Outlook. May 2019

Summary

The net profit of the system in 2018 was €12.4 billion, the highest since 2009. The key factors affecting the results were cost control and lower provisions. The deleveraging of the private sector continues and the level of NPLs maintains its downward trend. Efficiency and profitability improved compared to 2017 levels.

Key points

• Key points:
• Bank lending survey: the demand for credit continues to decelerate in the eurozone
• The cost of equity in European banking: on a downward trend since 2008 despite a higher bank-specific risk
• The new regulation on NPL coverage combines three frameworks: accounting, prudential and supervisory
• SREP capital requirements in the eurozone rise due to the activation of counter-cyclical buffers

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