EBA Risk Dashboard indicates limited direct impact on EU banks from the Russian invasion of Ukraine but also points to clear medium-term ris

01 April 2022

- First-round risks stemming from the Russian invasion of Ukraine are not a fundamental threat to the stability of the EU banking system, but second-round effects may be more material- EU bank capital and liquidity ratios remained strong

- Profitability stabilised at higher levels than in the pre-pandemic period
- Non-performing loan (NPL) ratios declined as asset quality continued to improve
- Cyber and information and communication technology (ICT) related risks remain high

The European Banking Authority (EBA) published today its Risk Dashboard for the fourth quarter (Q4) of 2021. A special feature highlights the potential impact of the Russian invasion of Ukraine on the EU/EEA banking sector. Based on the EBA’s initial assessment, direct exposures to Russia, Belarus and Ukraine are limited, but second-round effects may be more material from a financial stability perspective.

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