## Figure 1.19. Euro Area Bank Profits and Funding

## Source details

**Canonical URL:** [Figure 1.19. Euro Area Bank Profits and Funding](https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-19.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-19.pdf.md)
- [Structured JSON version](/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-19.pdf.json)

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### Key messages
- Some banks are already facing rising wholesale funding costs ...... but central bank liquidity support should limit rises in the overall cost of funding.
- Bank provisioning is likely to curtail profitability ...
- ... as would a cleanup of bad loans.

### Panel descriptions and scenarios
- 1. Banking Sector Interest Rates on New Loans and Funding (Percent)
  - Labels and axes include: 0100200300400500600700800
  - (Percent)
  - Series shown: Estimated bank bond yield; Lending rate; Deposit rate; German government bond yield
- 2. Central Bank Liquidity Support to Banking Systems
  - Axes and units shown: Billions of euros
  - Country groupings: Countries with lower-rated sovereigns; Countries with higher-rated sovereigns; Total
  - Time labels appearing: 2009 11 13 15 17 19
- 3. Estimated Impact of Provisioning to Fully Cover New Nonperforming Loans on Profitability, 2019–23
  - (Percent of 2013–17 pre-provision profits, annualized)
  - Time horizon: 2019–23
- 4. Estimated Losses from Reducing Gross Nonperforming Loan Ratios to 5 Percent by 2023
  - (Percent of 2013–17 pre-provision profits, annualized)
  - Target year: 2023

### Findings, country labels, and numeric elements preserved from the figure
- Years and periods explicitly shown: 2017; 2019–23; 2013–17; 2009 11 13 15 17 19
- Axis numeric sequences and scales preserved as presented:
  - 0100200300400500600700800
  - 0
  - 50
  - 100
  - 150
  - 200
  - 250
  - 300
  - 350
  - 0
  - 1
  - 2
  - 3
  - 4
  - 5
  - 6
  - 7
  - 8
- Country ISO codes and specific countries shown in figure labels:
  - ITA
  - ESP
  - PRT
  - GRC
  - AUT
  - BEL
  - FRA
  - NLD
  - DEU
  - IRL
  - Total
- Countries with lower-rated sovereigns are defined as those where the government currently has a credit rating of BBB or below:
  - Cyprus, Greece, Italy, Portugal

### Notes on methodology and data sources (as presented)
- Sources: Bloomberg Finance L.P.; European Banking Authority; European Central Bank 2017 and 2018; Haver Analytics; national central banks; SNL Financial; and IMF staff calculations.
- Notes:
  - Panels 1 and 2 are for the banking system as a whole, while panels 3 and 4 are based on the banks in the European Banking Authority transparency exercise (EBA banks).
  - Panel 1 shows interest rates weighted by the type of loans or deposits.
  - Bank bond yields are estimated using average bank credit default swap spreads in each banking system.
  - Panels 3 and 4 show the amount of pre-provision profits (based on the average profits during 2013–17) that would be absorbed each year over the period 2019–23 by provisions for losses or from the disposal of bad debts in the simulations.
  - Data labels in the figure use International Organization for Standardization (ISO) country codes.

*Source: figure1-19 (PDF).*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-19.pdf_