Financial stability 2013
Overall, Danmarks Nationalbank finds that the banks are resilient to severe macroeconomic shocks. But they are still facing substantial challenges. Most banks have a low return on equity and high loan impairment charges. Moreover, earnings are under pressure from falling lending volumes. Since 2008, the banks have focused on strengthening their capital base. Most banks today hold sufficient equity to meet the forthcoming EU requirements for Common Equity Tier 1 capital. But there will also be a need for sufficient excess capital adequacy consisting of Common Equity Tier 1, and many banks will need to replace existing issuance of Additional Tier 1 capital and Tier 2 capital with issuances meeting the new requirements for subordinated capital. The banks' liquidity has also improved in recent years. The liquidity situation of the systemic banks is good, and they use short-term issuance only to a limited extent. Almost all government-guaranteed bonds issued in 2009-10 have been redeemed. The phasing-out has been satisfactory. Most non-systemic banks that faced challenges in connection with the expiry of government-guaranteed bonds have succeeded in adjusting their balance sheets and reducing the customer funding gap.