In the first quarter, the Eurozone’s major banks, supervised by the European Central Bank (ECB), experienced a slight dip in their capital ratios. The ECB reported that the Common Equity Tier 1 (CET1) ratio fell to 15.74% from 15.80% in the previous quarter. Despite this, banks saw a modest increase in return on equity (ROE), while the proportion of non-performing loans (NPL) rose marginally, and the share of impaired loans decreased.

The NPL ratio, excluding central bank reserves, edged up to 9.31% from 9.30%, whereas the ratio of Stage 2 loans dropped to 9.50% from 9.73%. Notably, loans secured by immovable property saw the highest Stage 2 loan ratio at 19.44%, up from 17.65%.

The cost of risk, calculated as the ratio of loan loss provisions to the average loan portfolio, increased to 0.50% from 0.46%. Meanwhile, ROE for major banks rose to 9.67% from 9.57% in Q1 2023, primarily driven by an 8.7% increase in net interest income. The net interest margin climbed to 1.62% from 1.48%.