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Treasury 4.x - Trends for Insurers
The productivity and performance of the treasury function within insurance companies have undergone a transformative evolution, driven by the emergence of what is now termed Treasury 4.x.
Find out moreAt the end of July, the European Banking Authority (EBA) released the results on the latest installment of the EU-wide stress test that is performed every two years.
Seventy banks have been considered, which is an increase of twenty banks compared to the previous exercise. The portfolios of the participating banks contain around three quarters of all EU banking assets (Euro and non-Euro).
Interested in how the four Dutch banks participating in this EBA stress test exercise performed? In this short note we compare them with the EU average as represented in the results published [1].
The general conclusion from the EU wide stress test results is that EU banks seem sufficiently capitalized. We quote the main 5 points as highlighted in the EBA press release [1]:
For further details we refer to the full EBA report [1].
Making the case for transparency across the banking sector, the EBA has released a detailed breakdown of relevant figures for each individual bank. We use some of this data to gain further insight into the performance of the main Dutch banks versus the EU average.
Using the data presented by EBA [2], we display the evolution of the fully loaded CET1 ratio for the four banks versus the average over all EU banks in the figure below. The four Dutch banks are: ING, Rabobank, ABN AMRO and de Volksbank, ordered by size.
From the figure, we observe the following:
The most important product the four Dutch banks have in common are the retail mortgages. We look at the evolution of the retail mortgage portfolios of the Dutch banks compared to the EU average. Using EBA data provided [2], we summarize this in the following chart:
Based on the analysis above , we observe:
This short note gives some indication of specifics of the 2023 EBA stress applied to the four main Dutch banks.
Should you wish to go deeper into this subject, Zanders has both the expertise and track record to assist financial organisations with all aspects of stress testing. Please get in touch.
The productivity and performance of the treasury function within insurance companies have undergone a transformative evolution, driven by the emergence of what is now termed Treasury 4.x.
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