In 2023, Crédit Mutuel led the top 15 European banks with a common equity tier 1 (CET1) ratio of 19.2 percent, followed by UniCredit at 16.1 percent. Following the Basel III accord implementation on January 1, 2015, European banks faced higher capital requirements, including a new minimum CET1 ratio of 4.5 percent. Throughout 2023, the EU banking sector demonstrated strong capital adequacy, with the banking sector's CET1 ratio significantly exceeding the regulatory minimum.
European banks on the global stage
European banks showcased their strength on the global stage, with the average CET1 ratio of the largest banks surpassing their U.S. counterparts. This signifies a robust capital position and resilience in facing economic challenges. HSBC represents European banks among the world's largest financial institutions. In 2023, the UK-headquartered bank made it to the largest 15 banks worldwide based on market capitalization, with a market cap of over 156 billion U.S. dollars.
Banking crisis: Nosedive in March 2023
The March 2023 collapse of Silicon Valley Bank (SVB) and Signature Bank in the United States sparked a banking crisis that quickly spread to Europe, culminating in Credit Suisse's distress. As investor confidence plummeted, major European bank stocks experienced steep declines. Although share prices partially recovered in late March, they remained significantly below their early-month levels. However, in the following months, the banking sector gradually stabilized as regulatory measures and central bank interventions helped restore market confidence.