According to EBA data, the average Capital Adequacy Ratio of EU banks was 19,3% in December 2019 – the highest level we have ever seen for years- mostly the result of capital enhancement actions taken by EU banks.
At the same time, asset quality metrics had been materially improved with the average NPL ratio declining to 2.7% which is again the best performance seen since the previous crisis. EU banks also enjoyed ample liquidity with the average Liquidity Coverage Ratio being at circa 150%, well above the regulatory minimum of 100%.