Financial services newsletter - Issue 2
Welcome to the second edition of our newsletter, where we cover some of the major developments across the financial services sector throughout the last quarter.
The study mainly focuses on the ECL-related impacts and covers:
Download of the Financial reporting of European banks – benchmark study YE 2022
We have analysed the YE 2022 reports of 26 banks in 11 European countries, including AIB and BoI, to better understand the impact of the recent unprecedented events on Expected Credit Losses (ECL). This study is the sixth in its series and follows on from our fifth edition of the report released in Q4’2022.
A decrease in the ECL coverage ratio from 1.57% in 2019 to 1.38% in 2022, lower weight of post-model adjustments (14% in 2022 vs 16% in 2021) and a very high variability of downside economic scenario weighting across institutions (between 10% and 85%) are the highlights of this study release. The two most frequently applied overlays were ‘Uncertainty in the macroeconomic environment’ and ‘Adjustments/stress for vulnerable sectors: CRE/RE, Retail/distribution, Transportation, Oil and Gas, Automotive’.
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