Now I would like to turn to the main findings of this report. In brief: The resilience of the EU banking sector has further improved in 2005 and the first half of 2006, adding to the trend in place since 2003. The most obvious cause of this enhanced stability is higher earnings. Profitability increased for EU banks across all size groups.
The return on equity (ROE) reached roughly 15%, an increase of around three percentage points from 2004 figures for both groups (those who adopted IFRS and those who didn’t). All in all, the banks benefited from the favourable economic environment and from the generally buoyant financial market conditions.