CRE refinancing risk remains high. We still believe that 40% of fully-extended securitised loans present high or very high refinancing risks but based on recent extension requests, moderate refi risk has increased materially from 23% to 41%.

Faster growth and higher interest rates in Central and Eastern Europe have boosted the profitability of Western European banks present in the region and supported their credit profiles. The strategic case for maintaining their presence remains intact.

Norwegian savings banks have displayed strong profitability on the back of the supportive interest-rate environment. We expect this to continue. The pace of credit expansion has abated but the banks have managed to continue growing their loan books.

Non-performing loans (NPLs) of EU banks continued to increase, hitting EUR 364.9bn according to the EBA’s latest Risk Dashboard showing data to Q4 2023. But the consolidated NPL ratio, at 1.85%, is still close to the historical low.

When it comes to assessing banks, high customer satisfaction, progress in digitalisation or brand value do not win arguments in investment, credit, or rating committees if financial metrics are not sufficiently reassuring.

After a strong January, EUR benchmark covered bond issuance slowed in February and March. Some of the reluctance to issue may have been driven by Germany’s specialised commercial mortgage lenders, given rising tensions in commercial real estate.

Tuesday, April 23rd 2024 - 3:30 PM (CEST)

Europe’s real estate companies grapple with negative credit outlook; German banks look resilient despite CRE risks; bond market access is a differentiator for property companies; systemic risks are still high in European housing

Stalling economic growth in France could herald a more difficult period for French banks. Lacklustre fourth-quarter bank results, which already cast a shadow over otherwise satisfactory full-year performance, look increasingly less like an anomaly.

February 2024 Italian NPL collections of EUR 114m were 15% up month-on-month but 18% below the February average of the three previous years.