Asset-quality indicators weakened across several markets. Banco do Brasil’s agribusiness delinquency ratio reached 6.27%, Nubank’s late-stage consumer delinquency rose to 6.9% and China’s commercial-bank NPL ratio edged up to 1.52%. China’s industry-level capital and provision coverage ratios remained above regulatory requirements.

Swiss lawmakers deferred a decision on proposals that could raise UBS’s parent-level CET1 requirement by around $20 billion. ABN AMRO expects its NIBC acquisition to reduce CET1 by 70–75 basis points. Switzerland also opened consultation on wider accountability, resolution and liquidity reforms following the Credit Suisse crisis.

Read more on the week’s key developments:

1. Banco do Brasil’s agribusiness defaults remain elevated

Banco do Brasil reported second-quarter results on 12 August, with the proportion of agribusiness loans more than 90 days overdue rising to 6.27%. Consumer delinquency reached 8.41%, partly reflecting stress in credit cards, while the corporate ratio was 3.18%. Its total credit portfolio exceeded BRL 1.3 trillion ($251 billion), supported by growth in agribusiness and household lending.

Agribusiness delinquencies have risen following crop failures and weaker conditions for some borrowers since 2024. Banco do Brasil recovered around BRL 2 billion ($386 million) of agricultural credit in July, but the portfolio’s delinquency ratio continued to rise in the second quarter. The lower corporate ratio leaves the deterioration concentrated in agribusiness and consumer credit.

2. Swiss committee leaves UBS capital proposal unresolved

The Economic Affairs and Taxation Committee of Switzerland’s Council of States deferred a decision on the Federal Council’s proposal to require systemically important banks to back the carrying value of foreign subsidiaries fully with CET1 at the Swiss parent. The government estimates that the proposed rules would increase UBS’s parent-level CET1 requirement by around $20 billion based on its end-2025 structure. Had the rules applied on 1 January 2026, the estimated CET1 shortfall would have been around $9 billion. The committee will resume its work at the end of August.

Full CET1 backing would insulate the Swiss parent’s available capital from valuation losses at foreign subsidiaries. The $20 billion estimate is not an immediate capital call of the same size. UBS’s additional need will depend on its parent-level capital, the value of its foreign holdings and the final rules.

3. Switzerland proposes stronger bank accountability and crisis-preparedness rules

The Swiss Federal Council opened consultation on a package of post-Credit Suisse reforms covering governance, supervision, resolution and liquidity preparedness. The proposals include clearer allocation of senior-management responsibilities, powers to defer, reduce or claw back variable remuneration following misconduct or losses, wider intervention and sanctioning powers for the Swiss Financial Market Supervisory Authority, stronger recovery and resolution planning and requirements to prepare assets for central-bank funding.

The senior managers regime would give FINMA a clearer basis for assigning responsibility and taking action after misconduct. The liquidity proposals would require banks to have assets ready to mobilise at the Swiss National Bank or other central banks during stress. The measures remain under consultation and their final scope has not been set.

4. China’s bad loans rise as capital and provisioning buffers remain ample

The National Financial Regulatory Administration’s second-quarter data showed commercial banks’ non-performing loans increasing by RMB 52.3 billion ($7.8 billion) to RMB 3.7 trillion ($552 billion), while the NPL ratio edged up to 1.52% from 1.51%. Banks held RMB 7.6 trillion ($1.13 trillion) in loan-loss provisions, equivalent to 202.87% of NPLs. The industry’s total capital adequacy ratio stood at 15.26%, with Tier 1 and core Tier 1 ratios of 12.12% and 10.72%, respectively. The liquidity coverage ratio fell by 3.12 percentage points to 148.53%.

The increase in NPLs was smaller than the RMB 174.2 billion ($26 billion) recorded in the first quarter. Reported capital, provision coverage and liquidity ratios remained well above minimum requirements at industry level, although the aggregate figures do not show differences between large banks and smaller regional lenders.

5. Nubank maintains rapid consumer-credit growth as late-stage delinquency rises

Nubank’s second-quarter credit portfolio reached $39.4 billion, up 37% year on year on a foreign-exchange-neutral basis. Early-stage delinquency of 15 to 90 days eased to 4.8% from 5.0% in the first quarter, while loans more than 90 days overdue increased to 6.9%. Credit costs declined sequentially to $1.69 billion from $1.79 billion, but remained about 60% higher than a year earlier. Risk-adjusted net interest margin rose to 12.4% from 9.9% a year earlier.

Early and late-stage delinquency measure different parts of the credit cycle. Early arrears improved while the stock of loans more than 90 days overdue continued to rise. Credit costs fell sequentially and risk-adjusted net interest margin increased as the portfolio expanded.

6. ABN AMRO expects NIBC acquisition to use part of CET1 headroom

ABN AMRO reported second-quarter net profit of EUR 781 million ($895 million), up 29% year on year, while its CET1 ratio rose to 15.9%. The bank raised its 2026 commercial net interest income guidance to EUR 6.8 billion ($7.8 billion), including NIBC, after completing the acquisition on 1 August. NIBC will be consolidated from the third quarter as ABN AMRO prepares for its legal merger and integration.

ABN AMRO’s 15.9% CET1 ratio at 30 June stood 4.4 percentage points above its 11.5% regulatory requirement and 2.15 percentage points above its 2028 target of more than 13.75%. The bank expects NIBC to reduce CET1 by 70–75 basis points when reflected in the third-quarter results, implying a simple pro forma ratio of about 15.2% before quarterly earnings, RWA movements and distributions. ABN AMRO is also continuing RWA optimisation and declared an interim dividend of EUR 0.68 ($0.78) per share.

7. ANZ reports weaker mortgage demand after Australian property-tax changes

ANZ’s third-quarter update showed home-loan application values falling 5% from the previous quarter and 12% since property-investment tax changes announced in the May federal budget, excluding applications under the government’s 5% deposit scheme. The bank recorded an AUD 102 million ($72 million) credit impairment charge, while non-performing loans were stable. Its Common Equity Tier 1 ratio stood at 12.51%. Quarterly cash earnings reached AUD 1.9 billion ($1.3 billion) and net interest margin increased by one basis point to 1.54%.

Mortgage applications also fell at Australia’s other three major banks, which together with ANZ account for more than 70% of the market. The reported declines ranged from 12% to 20%. At ANZ, the slowdown was concentrated in new applications, while non-performing loans remained stable.

8. MAS targets cultural causes of recurring control failures

The Monetary Authority of Singapore (MAS) on 12 August published an information paper setting out four capabilities that financial institutions should develop for more effective remediation. These cover board and senior-management oversight, identification of behavioural and cultural root causes, coordinated interventions and monitoring of whether remediation produces lasting changes in behaviour. The paper focuses on serious risk events that recur after corrective action.

MAS says institutions should look beyond the completion of remediation plans and assess the behaviour and incentives behind repeated failures. Boards and senior management are expected to oversee that work and monitor whether interventions have produced sustained change.

9. UBB Investment Bank pays $2.45 million over AML reporting failures

Bank Negara Malaysia and the Labuan Financial Services Authority on 14 August announced that UBB Investment Bank had paid MYR 10 million ($2.45 million) in compounds for failures in suspicious-transaction reporting and anti-money laundering controls. The Labuan-licensed investment bank failed to submit suspicious transaction reports promptly for 53 transactions conducted between 2023 and 2024. It also failed to identify and verify a customer properly during onboarding in 2023.

The 53 late reports and separate customer due-diligence breach covered customer verification during onboarding and the subsequent reporting of suspicious activity. The authorities instituted prosecution after the bank did not settle the compounds initially offered. Following written representations to the Attorney General’s Chambers, new compounds were imposed on 13 March and paid on 11 June.

10. US interagency council adds wholesale-funding measure to bank reports

The US Federal Financial Institutions Examination Council (FFIEC), which coordinates examination standards among financial regulators, added a ratio measuring liquid assets net of wholesale funding as a percentage of total assets to the Uniform Bank Performance Report during the week. Supervisors and bank managers use the report to compare institutions across liquidity, capital and asset-liability management.

The ratio shows the extent to which a bank’s liquid assets cover its wholesale funding and allows comparison with peer institutions. It forms part of the existing reporting framework and does not introduce a new liquidity requirement.

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