Financial reporting of European banks: benchmark study 2023

How are Expected Credit Losses of European banks impacted by increasingly common unprecedented events? In recent years, the banking sector has had to endure numerous crises, including the Covid-19 pandemic, the war in Ukraine and the subsequent global inflation. What do the 2022 annual results of the 26 largest banks in Europe indicate about the impact on Expected Credit Losses (ECL) in this unusual environment?

We have analysed the 2022 annual reports of 26 banks in 11 European countries to better understand the impact of “unprecedented events” on their Expected Credit Losses. This study is the sixth in its series and follows on from previous editions of the report since its launch in 2020.

A focus on Expected Credit Losses

The study mainly focuses on the ECL-related impacts and covers:

Weight of cumulative overlays in AC loans ECL allowance;
Breakdown of changes in AC loans gross credit exposure and ECL allowance by stage;
AC loans global coverage ratio;
Underlying parameters of macro-economic scenarios