The European Banking Authority (EBA) has published its Autumn 2025 Risk Assessment Report (RAR) on December 4, 2025. The report confirms that EU/EEA banks remain strong in capital, liquidity, profitability, and asset quality.
However, the EBA emphasizes the need for continued vigilance due to persistent geopolitical uncertainty, market volatility, and operational risks. The report includes data from 119 banks across 25 EU and EEA countries, supplemented by the Autumn 2025 Risk Assessment Questionnaire (RAQ).
Key findings include:
- Increased risks from geopolitical instability, trade tensions, and rising sovereign debt, leading to higher risk premiums and volatile funding markets. Banks remain vulnerable to external shocks.
- Geopolitical and geoeconomic risks are affecting market volatility, asset quality, lending strategies, and risk management. Banks are improving governance, due diligence, and scenario planning.
- Operational risks are high, driven by cyber threats, fraud, and legal risks. DDoS attacks and ransomware are prominent. The Digital Operational Resilience Act (DORA) is enhancing incident response. Outsourcing and third-party dependencies are growing concerns.
- Banks maintain a robust capital base with record-high capital ratios, supported by strong profitability. Despite declining net interest income, profits are sustained through fee income and cost control, with automation and digitalization as strategic priorities.
- Liquidity ratios remain above regulatory requirements, with buffers increasingly held in sovereign assets, raising sensitivity to market volatility. Some banks face foreign currency funding and liquidity risks, especially in USD. Growing interest in stablecoins may influence long-term funding and liquidity management.
- Asset growth was driven by mortgage lending and increased lending to non-EEA non-bank financial institutions. Exposures to sovereigns increased, but domestic bias is decreasing.
- Asset quality remains stable with low non-performing loan ratios, though stage 2 loans are elevated in commercial real estate and SME segments, requiring close monitoring.
