Regulatory breaks strengthened EU banks’ CET1 ratios in 2020
In spite of Covid turmoil, top lenders improved their CET1 ratios by around 70bp on average
Top banks in the European Union saw their solvency ratios climb over the course of a wild 2020 – driven not only by earnings, but also a raft of Covid relief measures and fast-tracked changes to the regulatory capital framework.
The average Common Equity Tier 1 (CET1) ratio of 15 major EU lenders tracked by Risk Quantum averaged 14.9% at end-2020, some 70 basis points higher than a year earlier.
An array of factors affected risk-weighted assets (RWAs) – the denominator of the CET1 ratio –
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