BearingPoint Banking Study 2025
European banks are showing resilience in challenging times. This is the conclusion of the latest banking study by BearingPoint. The institutions have managed to increase their liquidity and stabilise their profits. A key challenge for the coming years will be new regulatory requirements. According to the study, Swiss banks have continued to build their equity capital thanks to profits from previous years, but they still lag their European counterparts in terms of profitability – due in part to low interest rates. The effects of the Credit Suisse takeover also remain visible.
Zurich, 1 July 2025 – In a still-challenging economic environment, the European banking sector is proving resilient and forward-looking. This is the conclusion of the latest banking study, conducted for the seventh time by the management and technology consultancy BearingPoint. The data reveals that banks have further strengthened their liquidity compared to the previous year, stabilised or even increased their net profits – and are increasingly investing in technologies and sustainable business models.
From a Swiss perspective, the results show that the takeover of Credit Suisse by UBS continued to have significant effects on bank balance sheets and lending in Switzerland. The sharpest declines were seen in Lombard loans and real estate lending. There was also a reduction in deposits held with central banks, reflecting falling interest income opportunities and reduced excess liquidity.
Marco Kundert, Partner, Banking & Capital Markets at BearingPoint Switzerland
More capital, higher profits, stable income
The slight increase in the average total capital ratio of European banks demonstrates the sector’s improved resilience. In 2024, it stood at 23.5%, marking the third consecutive year of growth (2023: 23%, 2022: 22%). A particularly strong signal is that institutions were able to strengthen their equity – with profits from previous years enabling an increase of 4.7% in 2024. Germany (+15.4%) and Mediterranean countries (+11.7%) stood out especially.
Earnings also remained stable: many banks maintained or even increased their net profits despite rising costs. Fee-based business is showing particularly positive development and is becoming a key pillar of profitability – complementing banks’ main source of income, the net interest margin.
Strong liquidity and stable profits demonstrate stress resilience
The BearingPoint study shows that banks have further improved their liquidity ratios. The average Liquidity Coverage Ratio (LCR) rose to 230%, demonstrating the sector’s stability. A notable contrast exists between large and small banks: while large institutions operate with an LCR of 167%, smaller banks adopt more conservative approaches, with ratios as high as 270%. Structurally, banks continue to access stable sources of refinancing. The Net Stable Funding Ratio (NSFR) averaged 146% in 2024, also rising for the third consecutive year (2023: 144.5%, 2022: 143.9%).
Investments and innovation
After years of cost-cutting and efficiency gains necessitated by the low-interest environment, banks are now reinvesting – particularly in IT infrastructure. The use of Artificial Intelligence (AI) is particularly noteworthy, as illustrated by one international major bank: its AI-supported fraud detection system achieved 97% accuracy and reduced document processing time by 40%. "Agentic AI" is emerging as a key trend in artificial intelligence – it acts autonomously within defined parameters. Forecasts suggest that by 2030, a significant share of financial interactions in developed economies will be handled by agent-driven systems. These agents will be capable of making complex financial decisions, assessing risks, and developing personalised financial strategies.
Sustainability as a strategic advantage
Another sign of industry transformation is the growing importance of sustainability. The Green Asset Ratio (GAR), disclosed for the past two years, shows that sustainability is no longer a fringe issue. Larger banks tend to report higher values, thanks to their greater resources and investor pressure. However, a financial institution’s sustainability performance can only be partially reflected through the GAR.
Sustainability is increasingly becoming a regulatory obligation for Swiss banks as well. With CRR III, CSRD and FINMA requirements, pressure is mounting not only to identify ESG risks, but also to actively manage and transparently disclose them. Those who act early will strengthen their market position and meet the expectations of regulators and investors.
Katharina Casanova, Partner, Banking & Capital Markets at BearingPoint Switzerland
Cost-income ratio increases
The BearingPoint Banking Study 2025 also points to some less positive developments in the industry: the cost-income ratio (CIR) – a key indicator of profitability – has increased, thus worsening. In 2024, the CIR in Europe rose slightly to 53.5% (+0.8 percentage points) after a significant reduction the year before. The main drivers were higher personnel and IT costs.
More non-performing loans across Europe; German banks face corporate insolvencies
The ongoing market crises are reflected in the slight increase in non-performing loans (NPL) among European banks (+1.1% vs. 2023). Germany recorded the sharpest rise in NPLs across Europe, at +24.9%. The main reasons are the sharp rise in corporate insolvencies and massive value losses and defaults in commercial real estate lending. In contrast, interest burdens for Swiss borrowers declined, driven by the Swiss National Bank’s expansionary monetary policy. As a result, NPLs in Switzerland fell by -1.5% compared to 2023.
Regulatory challenges and economic crises
New regulatory requirements such as DORA (Digital Operational Resilience Act) and CRR III have now entered the implementation phase after years of preparation – and pose challenges for the industry across Europe.
Increasing demands related to capital, sustainability and technology raise a central question: are banks actively helping to shape regulation – or are they being shaped by it? As the current debate on new capital requirements shows, larger banks are actively participating in the discussion, while smaller institutions are catching up with existing rules.
Marco Kundert, Partner, Banking & Capital Markets at BearingPoint Switzerland
In addition, macroeconomic uncertainty and geopolitical crises are driving up risk-weighted assets (RWAs) and risk provisions. In 2024, European banks recorded a moderate 1.3% increase in RWAs compared to the previous year. Ongoing uncertainty (Ukraine–Russia conflict, US–China trade war) is still limiting banks' ability to reduce balance sheet risks – although the first signs of recovery are visible (the RWA increase from 2022 to 2023 was still 4.3%).
Our analysis shows that IT costs in Switzerland rose by 16.4% in 2024, driven by the integration of Credit Suisse and ongoing digital transformation. The cost-income ratio (CIR) of Swiss banks remains high in a European comparison, at 65.3%, due in part to their strong focus on international wealth management.
Katharina Casanova, Partner, Banking & Capital Markets at BearingPoint Switzerland
About the study
The BearingPoint Banking Study 2025 is based on analysis of the annual financial statements of 163 European banks over the past three years (2022 to 2024). All institutions are supervised by either the European Central Bank (ECB) or a national regulator. The aggregated total assets of the banks analysed in 2024 amounted to approximately EUR 40 trillion and included financial institutions in the eurozone, other EU member states and non-EU countries such as the UK, Switzerland and Norway. The full study (in german) is available for download here.
About BearingPoint
BearingPoint is an independent management and technology consultancy with European roots and a global reach. The company operates in three business units: Consulting, Products, and Capital. Consulting covers the advisory business with a clear focus on selected business areas. Products provides IP-driven digital assets and managed services for business-critical processes. Capital delivers M&A and transaction services.
BearingPoint’s clients include many of the world’s leading companies and organizations. The firm has a global consulting network with more than 10,000 people and supports clients in over 70 countries, engaging with them to achieve measurable and sustainable success.
BearingPoint is a certified B Corporation, meeting high standards of social and environmental impact.
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