Comments on banking system developments in the first three quarters of 2023

Published: 29/11/2023

In the first three quarters of 2023, total assets of credit institutions increased by 3.0% from the end of 2022 and stood at EUR 78.2bn. Assets increased in most credit institutions.

Non-performing loans and advances (‘NPLs’) decreased by 10.6% and total loans and advances increased by 1.4%, relative to the end of 2022. Consequently, the share of NPLs in total loans and advances fell to 2.7% at the end of the third quarter of 2023. NPLs fell the most in the portfolio of loans to non-financial corporations where their share fell from 6.4% to 5.1%. The portfolio of household loans also saw a fall in the amount of NPLs, with their share falling from 5.0% to 4.4% of loans to that sector.

The operations of credit institutions generated EUR 1.1bn in profit in the first three quarters of 2023. Profitability indicators rose from the end of 2022. The return on assets (ROA) thus rose from 1.0% to 1.9% and return on equity (ROE) rose from 8.2% to 16.9%.

The key indicators of banking system capitalisation remained high, with the banking system capital ratio standing at 23.3%. All credit institutions boasted total capital ratios in excess of the minimum prescribed of 8%.

Credit institutions' liquidity measured by the liquidity coverage ratio (LCR) also remained very high. At the end of the three quarters of 2023, all credit institutions met the prescribed minimum liquidity requirements, with the average LCR standing at 235.4%.

Supervisory indicators