October 7, 2019 / 9:28 AM / 10 days ago

Euro zone banks face growing risk from maturing business cycle: ECB

FRANKFURT, Oct 7 (Reuters) - Euro zone banks face increased profitability challenges as the economic cycle matures and a prolonged period of low rates chips away at margins, the European Central Bank said on Monday, outlining key risks for the sector in the coming year.

“The three most prominent risk drivers expected to affect the euro area banking system over the next three years are: economic, political and debt sustainability challenges in the euro area; business model sustainability; and cybercrime and IT deficiencies,” the ECB said.

“These are followed by: execution risk attached to banks strategies’ for non-performing loans (NPLs); easing lending standards; repricing in financial markets; misconduct, money laundering and terrorist financing,” the ECB added in a regular assessment of risk. (Reporting by Balazs Koranyi; Editing by Toby Chopra)

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