Page 18 - EBA 2013.2869 Risk Assesment Report final proof4

Basic HTML Version

E U R O P E A N B A N K I N G A U T H O R I T Y
16
ing has been occurring in financially stressed
countries and this trend is set to continue,
partly due to their ongoing macroeconomic
and financial adjustment programmes. For
this reason, completing the action of balance
sheet repair in the banking sector, far from
hampering growth is instead a precondition
for kick-start lending into the real economy.
There is still a need for adjustments to re-
move excess capacity and to restructure bal-
ance sheets, and to set the basis for a more
stable and sound banking sector. There are
indicators that a downsizing of banks’ bal-
ance sheets has started and continues to
take place to complete the repair of their bal-
ance sheets.
Over the last 12 months while total assets
remained fairly stable, risk-weighted assets
decreased by 6.3 %, approximately EUR 673
billion. In parallel, the loan-to-deposit ratio
has shown a general downward trend in the
last few years, indicating a steady reduction
in the on-balance-sheet financial sector lev-
erage to sustainable levels.
According to the KRIs, the loan-to-deposit ra-
tio continues to decrease markedly. Not only
0 %
20 %
40 %
60 %
80 %
Asset deleverage is an element of your strategy
a. If yes:
i. It was required or suggested by national
supervisors
ii. It is part of the EU State aid conditions
iii. It was decided by your bank independently
Jun 2013 — Agree
or somewhat agree
Dec 2012 — Agree
or somewhat agree
Jun 2012 — Agree
or somewhat agree
Figure 6: Deleverage (
source:
RAQ)
The length of the bars shows the percentage of respondents who agreed or somewhat agreed with the statement on the y-axis.
0 %
20 %
40 %
60 %
80 %
If applicable, your deleverage strategy is driven primarily (even if not solely) by:
a. Lower level of investment banking/trading
b. Lower demand for credits
c. The decision to de-risk further your bank’s business and balance sheet
(e.g., shedding highly risky or less profitable assets, non-core assets)
d. Funding constraints
e. No immediate funding constraints but the desire to match asset growth
to liability growth under your chosen funding mix
f. The need to avoid growing ALM mismatches by relying too heavily on STF
g. The need to avoid relying too heavily on central bank borrowing (for the EZ: MRO-LTRO)
h. Constraints on the existing level of capital
i. Constraints due to future capital needs (required by either regulators or markets or both)
Jun 2013 — Agree
or somewhat agree
Dec 2012 — Agree
or somewhat agree
Jun 2012 — Agree
or somewhat agree
Figure 7: Deleverage drivers (
source:
RAQ)
The length of the bars shows the percentage of respondents who agreed or somewhat agreed with the statement on the y-axis.