Basel III risk-based capital ratios increased while leverage ratios and net stable funding ratios (NSFR) remained stable for large internationally active banks in the first half of 2024, according to the latest Basel III monitoring exercise, published today.

The report, based on data as of 30 June 2024, sets out trends in current bank capital and liquidity ratios and the impact of the fully phased-in Basel III framework, including the December 2017 finalisation of the Basel III reforms and the January 2019 finalisation of the market risk framework. It covers both large international active banks (Group 1) and other smaller banks (Group 2).

The implementation of the final elements of the Basel III minimum requirements began on 1 January 2023. At the end of the first half of 2024, the average impact of the fully phased-in final Basel III framework on the Tier 1 minimum required capital (MRC) of Group 1 banks was +1.9%, compared with +1.3% at end-December 2023. Group 1 banks report a minor regulatory capital shortfall of EUR 0.9 billion ($969 million), compared with no shortfall at end-December 2023.

The monitoring exercise also collected bank data on Basel III liquidity requirements. The weighted average liquidity coverage ratio (LCR) decreased slightly compared with the previous reporting period to 136% for Group 1 banks. Three Group 1 banks reported an LCR below the minimum requirement of 100%.

The weighted average NSFR was stable at 124% for Group 1 banks. All banks reported an NSFR above the minimum requirement of 100%.

 Re-disseminated by The Asian Banker