Banks’ balance sheet being threatened by move into riskier portfolios. EBA highlights bleak outlook for banks 

The European Banking Authority (EBA) published its annual Report on risks and vulnerabilities in the EU banking sector.

The Report is accompanied by the publication of the 2019 EU-wide transparency exercise, which provides detailed information, in a comparable and accessible format, for 131 banks across the EU. Overall, EU banks’ solvency ratios remained stable, while the NPL ratio further contracted. Nevertheless, low interest rate environment, along with increased competition is expected to add further pressure on banks profitability. Considering these factors, a proactive management of operating expenses is essential.

This article provides further insight on the European Banking Authority outlook on the main risks and vulnerabilities.