LONDON (Reuters) – European Union banks improved their profitability in the third quarter of 2021 as government measures during the health crisis reduced bad debt volumes, the European Banking Authority said on Monday. (ABE).
“Asset quality has improved further, but concerns remain about loans that have benefited from moratoriums and public guarantees due in particular to the uncertainties created by the Omicron variant of COVID-19”, indicates the European supervisor in a quarterly report on risks in the banking sector.
“Profitability has stabilized at levels higher than those observed before the pandemic. The majority of banks expect an increase in operational risks mainly due to high cybersecurity risks”, also notes the ABE.
The bad debt ratio fell 20 basis points from the third quarter of 2020 to 2.1%. For its part, the return on equity (RoE) rose to 7.7% against 2.5% in Q3 2020 and 5.7% in Q3 2019.
The EBA study covered a sample of 131 banking establishments representing more than 80% of the assets of the banking sector in the European Union.
(Huw Jones report, French version Matthieu Protard, edited by Blandine Hénault)
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