Research Note
Transatlantic Basel divergence: 2027 becomes the hinge year for bank capital
UK Basel 3.1 rules and a softened EU trading-book regime both start on 1 January 2027. The US proposals would cut the largest banks' CET1 requirements by 2.4% and drop the output floor, widening the gap with Europe.
EBA's 2027 stress test: 55% fewer datapoints, first climate integration — and what it means for global banks
Draft rules for the 2027 EU-wide stress test cut required data points by 55% and add a climate module that leaves core results untouched, while the 63-bank sample includes the EU entities of Goldman Sachs, JPMorgan, HSBC, Barclays and Citibank.
Capital is back: why Europe is defending post-crisis buffers while Switzerland hardens the UBS standard
Euro area banks face 2026 CET1 requirements and guidance of 11.2%, and the ECB wants simpler buffers, not lower ones. Switzerland goes further: full CET1 backing of UBS's foreign subsidiaries, adding about USD 20bn of CET1 at the parent bank.
Fed stress test 2026: capital drawdown is shallow, but the more important signal is the SCB ‘transmission break’ to 2027
All 32 banks stayed above minimum CET1 in the 2026 Fed stress test, with the aggregate ratio falling 1.6pp to a projected minimum of 11.2%. Yet the results leave requirements untouched: SCBs disclosed in 2025 stay until 2027 while the Board reviews feedback on its models.
Europe's capital 'stacking' problem: what the EBA's June blueprint means for CET1 headroom and MREL issuance
The EBA would fold the CCyB and systemic risk buffer into one releasable buffer of about 1.1% on average and align MREL with TLAC, while deferring to future consideration an option that would leave 83 resolution banks €138.5bn short of MREL.
Conversion, not writedown: a BIS FSI brief on fixing AT1
AT1 triggers sit at a minimum of 5.125% CET1, or 7% in many jurisdictions, while 14 of 29 G-SIBs faced CET1 requirements above 10% at end-2024. An FSI brief proposes conversion-only AT1, higher automatic triggers and an end to writedown.
Bail-in credibility is repricing: what BIS research says investors learned from Credit Suisse
Bail-in spreads at European banks tightened by 31bp within a year of the Credit Suisse rescue while senior spreads did not move, a BIS working paper finds, evidence it reads as weaker bail-in credibility and reduced market discipline.
Instant-payment rails scaled up in the UAE and Egypt in 2025, while mada led Saudi Arabia's e-payment growth
Aani transfers rose sixfold in 2025, Egypt's InstaPay passed 16 million users and SAMA credited mada for Saudi e-payments reaching 85% of retail payments: central-bank rails are reshaping how Gulf and Egyptian banks move money.
Major Gulf banks' full-year 2025 profits rose as corporate lending and fee income diversification drove returns
Al Rajhi Bank and SNB together earned SAR49.8 billion in 2025 on corporate lending and fee growth, while FAB's non-interest income rose 36%; at Emirates NBD a 41% higher tax charge cut 10% pre-tax profit growth to 4% after tax.
Basel IV is now live in the EU, with the UK to follow in 2027: early data shows capital impacts broadly in line with pre-implementation estimates
A fully loaded CRR3 cut of 129bp to EU banks' aggregate CET1 ratio, mostly from the output floor, against 140bp estimated before go-live and a day-one effect of 3bp; UK rules take effect on 1 January 2027.
UK challenger banks and Brazil's Nubank scaled up deposits in 2025, as incumbents bought scale
Nubank ended 2025 with $41.9bn of deposits and Monzo's rose 48% to £16.6bn, against 3% growth at Lloyds; the challengers hold far more deposits than loans, while UK incumbents are adding balances through acquisitions such as TSB.
German banks face continued commercial real estate stress as office values remain well below their mid-2022 level
German office prices fell 13.7% between mid-2022 and the third quarter of 2025, BaFin reports, while commercial real estate NPL ratios reached 6.4% at significant institutions and 4.4% at less significant institutions.