I will cover both cyclical and structural factors, as well as possible ways for banks to return to sustainable profitability. Cyclical factors have helped improve bank profitability in recent years Bank performance is closely linked to economic activity.
In fact, bank profitability has improved in 1/4  BIS central bankers' speeches  the past few years on the back of continued economic growth, with euro area banks’ ROE reaching 6% in 2018, up from 3% two years earlier. Cyclical factors have supported these profitability improvements via three channels.