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Cypriot and Hungarian Banks Lead Eurozone in Shareholder Profitability, EBA Report Shows

Banks in Cyprus and Hungary have emerged as the most profitable for shareholders within the Eurozone, according to the European Banking Authority (EBA) report released on Friday, highlighting their robust performance in terms of Return on Equity (RoE). As of the end of September 2023, Cypriot banks achieved an impressive RoE of 25.2%, marking a significant increase of 2.8% compared to the same period in 2022. Hungary secured the top position with an even more remarkable RoE of 28.4%.

Cypriot and Hungarian Banks Lead Eurozone in Shareholder Profitability, EBA Report Shows

In contrast to the average RoE of 10.9% for European banks during the same period, Cyprus and Hungary demonstrated exceptional profitability, attributed to the broadening of net interest margins, which stood at 1.62% in the third quarter of 2023, and the increase in net interest income.

Despite the overall positive financial outlook, lending growth across the European Union has been sluggish due to stringent lending standards. The EBA's autumn Risk Assessment Questionnaires (RAQs) revealed that banks continue to exercise caution in lending. However, the survey did not observe a reduction in outstanding loans to non-financial firms and households.


In terms of non-performing loans, Cyprus reported a ratio of 2.6% at the end of September 2023, showing a decrease from 3.2% in the corresponding period the previous year. The European banking system maintained an average of 1.8% in bad loans, indicating consistency with the figures from the previous year.

The EBA's assessment underscores the remarkable financial performance of Cypriot and Hungarian banks, positioning them as leaders in shareholder profitability within the Eurozone. Despite challenges in lending growth, the overall stability and positive trends in key financial indicators contribute to a favorable outlook for these banking sectors.



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