EU/EEA banks show resilience with strong capital and liquidity in 2026

The European Banking Authority (EBA) published its Risk Dashboard for the second quarter of 2026, highlighting the resilience of EU/EEA banks amid a challenging environment. Banks continue to display robust capital and liquidity buffers, with a Common Equity Tier 1 ratio of 16.1% and high-quality liquid assets, including an 8.7% increase in sovereign bonds during the first half of 2026.

Liquidity positions remain strong, with a Liquidity Coverage Ratio of 158.5% and a Net Stable Funding Ratio of 125.7%, both well above minimum requirements. Banks’ capital buffers provide substantial capacity to absorb shocks, with around 430 basis points of headroom above regulatory requirements.

Lending growth persists, with loans to households increasing by 5.2% year-on-year and loans to non-financial corporations rising by 6.3% year-on-year. Asset quality remains sound, with a non-performing loan ratio of 1.8% and a decline in Stage 2 loans to 8.9%. Exposures to the IT sector are limited to 4% of corporate lending, with no signs of deterioration.

Profitability remains high, with a return on equity of 11.3%, driven mainly by net interest income and widening net interest margins, which increased to 1.63%. Cost-to-income ratio improved to 51.5%. Despite geopolitical tensions and rising interest rates, funding conditions remain favorable, although increasing operating expenses and credit risk costs are potential concerns.

Key indicators are visualized in the EBA’s interactive data slides, covering capital ratios, loan growth, profitability, and risk metrics.