Financial reporting of European banks: benchmark study 2026

3 June 2026

Tags Financial services Banking & capital markets Audit & assurance Risk & regulation

European banks continue to operate in a macroeconomic environment that remains uncertain. Geopolitical tensions, market volatility and evolving economic outlooks continue to shape forward-looking expectations across the sector. Yet, the analysis of major European banks’ 2025 annual reports does not show a generalised deterioration in credit risk. Can European banks sustain their resilience amid mounting uncertainty?

Our latest benchmark study analyses the expected credit loss (ECL) levels of 26 large European banking groups, based on their 2025 annual reports published before 1 April 2026. It examines the impact of ECL charges on profitability, movements in ECL allowances and coverage ratios, the allocation of exposures between IFRS 9 stages, the use of post-model adjustments and overlays and the macroeconomic scenarios used in forward-looking information.

Key insights

The average ECL charge increased by 14% year-on-year while its average share of operating profit before ECL remained broadly stable at 13%.
Gross credit exposures on amortised cost loans increased by 3%, mainly driven by Stage 1 exposures while ECL allowances decreased by 1.9%.
The average coverage ratio for amortised cost loans fell to 1.2%, compared with 1.26% in 2024 and 1.57% in 2019.
Stage 1 coverage ratios decreased across the sample while Stage 2 and Stage 3 coverage ratios increased slightly on average.
Post-model adjustments and overlays continued to decline, representing 9% of amortised cost loan ECL allowances in 2025, compared with 10% in 2024.
Banks’ forward-looking scenarios continue to reflect caution, with downside scenarios weighted at or above 20% by most banks in the sample.