ECB Annual Report on supervisory activities

7 The European banking sector in figures
Since December 2016 aggregate data on the balance sheet composition,
profitability, solvency and credit risk of supervised banks have been provided on the
<strong>ECB</strong>’s banking supervision website. These supervisory banking statistics are
disclosed on a quarterly basis and include breakdowns according to geography and
bank classification.
The most important statistics relevant to the period under review are presented
below.
A trend towards higher capital ratios since the beginning of 2015 can be observed if
we examine the sample of SIs at the highest level of consolidation (see Table 1). The
total capital ratio stood at 17.2% in the third quarter of 2016, up from 16.1% one year
previously. Similar increases can be observed for the CET1 ratio and the Tier 1 ratio.
Table 1
Total capital ratio and its components by reference period
(Percentages)
Indicator Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016
CET1 ratio 12.77% 13.52% 13.31% 13.52% 13.70%
Tier 1 ratio 13.59% 14.34% 14.19% 14.40% 14.59%
Total capital ratio 16.06% 16.85% 16.65% 16.96% 17.19%
Source: <strong>ECB</strong>.
Notes: Significant institutions at the highest level of consolidation for which common reporting on capital adequacy (COREP) and financial reporting (FINREP) are available. The list
of banks used for the various reference periods may differ as the list of significant institutions changes and as banks start to report under FINREP obligations. Specifically, there were
102 banks in the second and third quarters of 2015, 117 in the fourth quarter of 2015 (increase in FINREP reporting obligations), 123 in the first quarter of 2016, and 124 in the
second quarter of 2016 (changes to the list of significant institutions and FINREP reporting obligations). The number of entities per reference period is expected to stabilise in future,
and any changes will result from amendments made to the list of significant institutions following assessments by <strong>ECB</strong> Banking Supervision, which generally occur on an annual
basis.
Furthermore, the overall NPL ratio has been steadily decreasing, from 7.3% in the
third quarter of 2015 to 6.5% in the third quarter of 2016.
Table 2
Asset quality: non-performing loans and advances by reference period
(Percentages)
Indicator Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016
Non-performing loans ratio 7.31% 7.03% 6.85% 6.61% 6.49%
Source: <strong>ECB</strong>.
Notes: Sample as in Table 1.
Loans and advances in the asset quality tables are displayed at gross carrying amount. In line with FINREP, held-for-trading exposures are excluded, whereas cash balances at
central banks and other demand deposits are included.
Banks’ total assets and liabilities (see Tables 3a and 3b) reflect the data for the
sample of entities at specific points in time. The sample of banks used in the various
reference periods differ as (a) the list of significant institutions has changed and (b)
banks that prepare their consolidated accounts under national accounting standards
(nGAAP) and those that report only at solo level have started submitting FINREP.
<strong>ECB</strong> <strong>Annual</strong> <strong>Report</strong> on supervisory activities 2016 − The European banking sector in figures 73