In this Banking Risk Indicators report, S&P Global Ratings has updated its indicators on the 85 banking systems it covers since the last report published on April 22, 2024.

This report contains historical data and forecasts on 11 selected indicators that we consider particularly relevant in our assessment of the relative strengths and weaknesses of banking systems globally, as expressed in our Banking Industry Country Risk Assessments (BICRAs). A glossary at the end of this article explains the definitions of the reported indicators.

We obtain historical data for banking industry-specific indicators primarily from central banks, statistical offices, and banking associations. If the data are not available, we estimate systemwide numbers, based on the aggregate data published by banks individually. We mainly aim to collect statistics on domestic operations. However, when unavailable, we use statistics from consolidated operations. Banking industry-specific forecasts are our best estimates at the date of publication of this article.

We note that information is not always fully comparable across jurisdictions as disclosure, transparency, and accounting standards vary across countries.

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Glossary Of Terms

Change in inflation-adjusted housing prices (%).  Annual percent change in residential house price, at a national level, adjusted for the change in the general price level.

Domestic private sector credit (% of GDP).  We use the broadest measure of private sector debt available to calculate change in private sector debt, which includes: Borrowing of nonfinancial corporates from banks and all other sources, including finance companies, insurance companies, domestic and international capital markets, and pension funds; Borrowing of the household sector from banks and all other sources, including finance companies; and Borrowing of public sector entities from banks and all other sources if we do not see this debt effectively as the respective government's liability.

Change in private sector debt (percentage points of GDP).  Annual change in the private sector debt, expressed as a percent of nominal GDP.

Households' debt (% of GDP).  Sum of all borrowings of resident households in all currencies, expressed as a percent of nominal GDP.

Nonfinancial corporates' debt (% of GDP).  Sum of all borrowings (including loans provided by both resident and nonresident financial institutions and debt issued in the capital markets) of the nonfinancial corporate sector in all currencies, expressed as a percent of nominal GDP.

Domestic nonperforming assets (% of domestic loans).  Sum of problematic exposures (including loans and foreclosed assets) due by resident private and public borrowers to a country's resident financial institutions, expressed as a percent of total loans granted to domestic private and public borrowers. The definition of problematic exposures varies from country to country. The general standard is that exposures past due for more than 90 days are classified as nonperforming. In some jurisdictions this also includes exposures that are up to date in their payment obligations but that run the risk of becoming delinquent. For some countries in Europe, we use Nonperforming Exposure based on the definition of the European Banking Authority. Performing restructured loans are only included in a few countries (for example, Italy). For a number of countries, nonperforming assets of domestic exposures alone are not available. In such cases we therefore use the aggregate of nonperforming assets and loans, both variables including domestic and foreign exposures.

Domestic credit losses (% of domestic loans).  We measure domestic credit losses by either the amount of net charge-offs of private sector exposures recognized in a given year or by the sum of loan loss provisions allocated to cover potential losses on exposures to resident private and public borrowers by resident financial institutions. Both are expressed as a percent of the average balance of loans granted to domestic borrowers. For a number of countries, credit losses for domestic exposures alone are not available. In such cases we use the aggregate of credit losses and loans, both variables including domestic and foreign exposures.

Domestic banks' return on equity (ROE) (%).  Annual net income reported by resident financial institutions' domestic operations, expressed as a percent of their aggregate average equity base. For a number of countries, banks' ROE ratios on domestic business alone are not available. In such cases we use banks' ROE on consolidated operations (domestic and foreign).

Domestic banks' return on average assets (ROAA) (%).  Annual net income reported by resident financial institutions' domestic operations, expressed as a percent of their average adjusted domestic assets. For a number of countries, banks' ROAA ratios on domestic business alone are not available. In such cases we use banks' ROAA on consolidated operations (domestic and foreign).

Domestic loans (% core customer deposits).  Sum of loans granted to resident private and public borrowers, expressed as percent of outstanding core deposits (placed by resident households and 50% of deposits placed by corporate clients with resident depository institutions in a country). Deposits could be either in local or foreign currency.

Net external debt of banks (% of domestic loans).  Aggregate liabilities (including deposits) of resident financial institutions toward nonresident lenders minus resident financial institutions' claims on nonresident borrowers, expressed as a percent of outstanding loans granted to resident public and private sector borrowers. A positive number shows a net debtor position; a negative number a net credit position. In the eurozone, banks' borrowings from the European Central Bank are accounted for as liabilities toward nonresidents.

Related Criteria

• Banking Industry Country Risk Assessment Methodology And Assumptions, Dec. 9, 2021
• Financial Institutions Rating Methodology, Dec. 9, 2021
• Sovereign Rating Methodology, Dec. 18, 2017

Related Research

• Sovereign Risk Indicators, Oct. 7, 2024
• Banking Risk Indicators: April 2024 Update, April 22, 2024