Mazars releases 2023 Financial reporting of European banks – revealing how the recent unprecedented events affected European banks

8 June 2023: Mazars, the international audit, tax and advisory firm has released the sixth edition of its Financial Reporting of European Banks report, which focuses on European banks’ Expected Credit Losses (ECL) levels in YE 2022. The report is based on analysis of information published in the 2022 annual reports of 26 banks across 11 European countries including the UK, France, Spain, Germany, Italy, and the Netherlands.
  • This report is based on Mazars’ analysis on the 2022 annual reports of 26 banks across 11 European countries, including analysis of key indicators over the past three years.
  • There have been significant regional trends on key indicators over the past three years, such as the volatility of ECL charge, the use of overlays and deleveraging strategy of stage 3 exposures. This year, we identified differences in expectations between the Eurozone and the UK, with the former being more conservative than the latter in its growth rate forecasts, compared to their respective regulators’ outlooks.
  • Since 2019, we have witnessed a series of unprecedented events, creating an increasingly challenging economic environment for European banks.

Over the past three years, there has been an evolution in the allocation of gross carrying amounts between ECL stages, resulting in a general significant decrease of stage 1 and stage 3 GCE in favour of stage 2 exposures. The changes in ECL allowances show a clear and homogenous trend, with a significant decrease of stage 3 in favour of stage 2, and to a lesser extent stage 1 exposures. This trend is illustrated by Italian banks which experienced a significant decrease of both stage 3 GCE and ECL allowances due to their non-performing loans deleveraging policies. 

Additionally, almost all banks using the Eurozone GDP growth rate are more conservative than the European Central Bank for the next three years, unlike the banks using the UK GDP growth rate, which all show more optimistic assumptions than the Bank of England.

The report reveals that over YE 2022, there have been clear differences between UK banks which strongly reduced the weight of overlays in their ECL allowances in YE 2022, and their French and Italian counterparts, which increased them amidst an average decrease of overlays in the ECL allowances.

The report is designed to serve as a practical benchmarking tool, helping credit institutions compare the impact of the macroeconomic climate on their business with their peers, Mazars will be returning next year with further research to see how these developments have affected banks and their ECL levels.

Vincent Guillard

Our new report underscores the impact of multiple unprecedented events in recent years on the performance of European banks. By providing financial institutions with benchmark information on the main trends and key performance indicators related to expected credit losses, we hope to give them access to the most relevant information to help them take a step back and see where they stand in relation to their peers both at a regional and European level. Mazars is committed to helping global banks navigate the economic and political obstacles, as well as regulatory challenges currently facing the banking industry.

Vincent Guillard Partner

Key findings from YE 2022 compared with YE 2021

  • The average ratio of ECL charge divided by the operating profit or loss before the ECL charge decreased to 17% in YE 2022 (vs 20% in YE 2021).
  • Although the trend in YE 2021 pointed towards either an overall reduction in the net ECL charge or a net ECL profit (-81% between YE 2020 and YE 2021), compared with the peak in ECL provisioning during the Covid-19 crisis, all banks of the sample have since returned to a net ECL charge in operating profit or loss before ECL (+106% between YE 2021 and YE 2022).

Exploring allowances, adjustments, and overlays

The report covers a number of important topics, including:

  • ECL charge impact of YE 2022 on the profit or loss and ECL allowances.
  • ECL allowances: changes in coverage ratios and allocation between stages.
  • Post-model adjustments and overlays.
  • Assessment of some of the forward-looking information contained in the banks’ annual reports.

Key findings from other topics

  • In YE 2022, three banks from our sample reclassified financial assets due to a change in business model during the reporting period.
  • All banks having TLTRO III liabilities early partially repaid in 2022, with a range from 14% to -86% compared to YE 2021 TLTRO III amounts in the balance sheet.
    • Eight banks disclosed information regarding the accounting treatment applied to TLTRO III modification in October 2022 by the ECB.
    • Most banks that disclosed this information treated this modification as a refixing of a floating interest rate without any impact on profit or loss.

Click here to download the full report.



This study is based on information disclosed in the annual reports of participating banks, without taking into account any press releases, investor-oriented presentations or similar publications.

Each bank is represented by an alphanumeric code composed of two letters, for instance, FR for France, and a number. When the sample presents only one bank in a country, to keep it anonymous, the country code is 'O' for ‘other countries'.

To increase comparability, we have chosen relevant indicators disclosed by a majority of the banks in the sample. Therefore, when a bank does not appear in a graph, it means they did not disclose data relevant to that graph.

Some figures presented, such as the ECL coverage ratio, have been calculated using input data from the annual reports. The detailed methodology for producing such figures is explained below.

About Mazars

Mazars is an internationally integrated partnership, specialising in audit, accountancy, advisory, tax and legal services*. Operating in over 95 countries and territories around the world, we draw on the expertise of more than 47,000 professionals – 30,000+ in Mazars’ integrated partnership and 17,000+ via the Mazars North America Alliance – to assist clients of all sizes at every stage in their development.

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