The European Central Bank published its supervisory banking statistics for significant institutions for the second quarter of 2025. The data show a broadly stable picture of capital strength, asset quality, profitability, and liquidity across euro area banks under direct ECB supervision.
Key figures:
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Capital adequacy: The aggregate Common Equity Tier 1 (CET1) ratio rose to 16.12% (from 16.05% in Q1 2025 and 15.81% a year earlier). Tier 1 stood at 17.60% and the total capital ratio at 20.24%. By country, CET1 ranged from 13.18% in Spain to 23.71% in Latvia.
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Asset quality: The aggregate non-performing loans (NPL) ratio fell slightly to 2.22%, down from 2.24% in Q1 and 2.30% a year ago. NPL ratios for households decreased to 2.16%, while for non-financial corporations it stood at 3.50%. Within corporates, SME loans had a higher NPL ratio of 4.85%.
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Profitability: The annualised return on equity (RoE) was 10.11%, up from 9.85% in Q1 and unchanged compared to one year ago. RoE varied widely across countries, from 6.97% in France to 17.44% in Lithuania. Net interest margin edged down slightly to 1.51%.
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Liquidity: The aggregate liquidity coverage ratio rose to 157.84%, up from 156.24% in Q1, mainly due to lower net liquidity outflows.
Core message: Euro area banks maintained strong capital positions and liquidity buffers in Q2 2025, while asset quality improved modestly and profitability remained stable overall, though with significant variation across countries.
(ecb.eurpoa.eu)
