The European Banking Authority’s Autumn 2025 risk assessment confirms EU/EEA banks remain strong in capital, liquidity, and profitability, despite ongoing geopolitical, market, and operational risks.
The European Banking Authority (EBA) has published its Autumn 2025 Risk Assessment Report (RAR), confirming that EU/EEA banks remain strong in capital, liquidity, profitability, and asset quality.
The report highlights increased risks from geopolitical instability, global trade tensions, and rising sovereign debt, which impact market volatility and banks’ asset quality. Banks are strengthening governance, enhancing due diligence, and embedding scenario planning to mitigate these risks.
Operational risks remain high due to cyber threats, fraud, and legal risks, with DDoS attacks and ransomware being prominent. The Digital Operational Resilience Act (DORA) is improving incident response, while outsourcing and third-party dependencies are growing concerns.
EU/EEA banks maintain robust capital ratios, driven by strong profitability, despite declining net interest income. High profits are supported by fee and commission income and cost control, with automation and digitalisation playing an increasing role.
Liquidity ratios remain above regulatory requirements, but buffers are increasingly composed of sovereign assets, which may increase sensitivity to market volatility. Some banks face foreign currency funding and liquidity risks, especially in USD, and the growing interest in stablecoins could impact long-term funding strategies.
Asset growth was driven mainly by mortgage lending and increased lending to non-EEA non-bank financial institutions, while exposures to sovereigns increased. Domestic bias is decreasing.
Asset quality remains stable, with low non-performing loan ratios, but elevated stage 2 loans, especially in commercial real estate and SMEs, require close monitoring. The report is available in digital format and includes detailed data and graphs.
