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European banks

Euro area growth: neither very fast nor particularly slow

European economy 11th September 2020

European Cross-Border Bank Mergers: Less Compelling After The Pandemic Than Before

EU agreement on a pandemic fund boosted market and regulators’ wishes to move towards cross-border consolidation among European banks- the ECB’s vice-president, Luis de Guindos, has already warned of the need for the sector to continue with the merger process. Scenarios have started to be built again about who should be merging with whom. But unity around the EU pandemic fund is not about banks, say analysts at Scope Ratings.

ECB Bundesbank

European economy 3rd August 2020

ECB’s Extended No-Dividend Recommendation: A Quid Pro Quo That Could Have Adverse Consequences

The ECB has finally decided to extend from 1 October this year until 1 January 2021 the recommendation to banks to not pay dividends to their shareholders. Nicolas Hardy, Analyst of Financial Institutions at Scope, thinks this measure is positive in the short term, but could be questioned in the long term as EU banks are facing different operating conditions in the wake of the pandemic.

bank generico

European economy 9th June 2020

The Spanish And Italian Banks Are The Least Capitalized, With A CET1 FL Of 11.9% And 13% Respectively

Santander Corporate & Research | Yesterday, the European Banking Authority published its 2020 transparency exercise, which takes data from individual banks at end-2019. The EBA’s findings indicate that the EU weighted average CET1 fully loaded capital ratio stood at 14.8% in Q4’19. Also yesterday, the European Systemic Risk Board (ESRB) published a second set of measures adopted in response to the coronavirus emergency, which include a recommendation to restrict capital distributions until January 2021.

The EBA proposes modifying stress tests

European economy 26th May 2020

European Banks: Asset Quality Ratios Are Not Proportional To The Extent Of Their Impairment Due To Covid19

Santander Corporate & Investment | Yesterday, the European Banking Authority (EBA) published a report with a preliminary assessment of the Covid-19 impact on the EU banking sector. The EBA flags up the fact that banks “entered the health crisis with strong solvency and liquidity reserves and managed the pressure on operational capacity by activating their contingency plans”. It also flags that “the crisis is expected to affect asset quality and therefore the future profitability of banks.

Andrea Enria

European economy 15th May 2020

Banks Should Keep Every Euro Of Capital To Absorb Losses And Continue To Provide Credit To The Economy, Says ECB’s Enria

Andrea Enria, the President of the European Central Bank (ECB) Supervisory Board, said in an interview that he expects banks to keep back over $27 billion of the $35 billion they planned to distribute in dividends as capital on their balance sheets. In addition to this, Enria said the institutions have also cancelled their current and planned share buy-back programmes

Financing costs for European banks will increase after TLTROs

European economy 13th April 2020

Credit Investors Take Heed: A Different Landscape Will Emerge For European Banks

Sam Theodore (Scope Insights) | The pandemic is fast pushing the European banking sector into a new and different stage; one that none of us could have anticipated. At this time there is no reason for credit investors to fear outright bank failuressincethis is not a copycat of the last financial crisis.(Even so and rather surprisingly, the risk of default for European banks is high in several credit-strategy models). There is, however, a clear need to reassess some of the underpinning rationales for investing in the debt of European banks.The dynamics of the landscape a rechanging and a return to the past is not likely anytime soon.

The EBA proposes modifying stress tests

European economy 27th January 2020

The EBA Proposes Modifying Stress Tests

The new European Banking Authority (EBA) proposal will be analysed and discussed by the parties involved up until April 30, with a public discussion session on February 21. It will give banks more room for manoeuvre in the calculation of their projections. That said, the agency has insisted standards will have to remain high. The banks will have to continue detailing capital requirements, major risk factors or exposure data.

ECB details 1

In Europe, Markets 28th November 2019

European Banks Strategy: The monetary policy cacophony

BOfAML | It is difficult for forward guidance to be credible when the institution is discussing whether any of its tools or targets are likely to be around in a few months. Embarking on a wide ranging discussion about monetary policy targets, communication and tools, with 25 relevant ECB board members, guarantees a cacophony. Volatility lies ahead for sure, we think.