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Lloyds, UniCredit lead as banks boost return on risk-weighted assets in Q3

All but three of the 20 largest banks in Europe and the U.S. saw a year-over-year increase in their third-quarter return on average risk-weighted assets, with Lloyds Banking Group Plc leading the table, according to data from S&P Global Market Intelligence.

Lloyds' RoRWA — a measure of whether a bank is generating adequate rewards for the risks it has undertaken — stood at 3.35% at the end of September, compared to 0.39% a year earlier, while those of British peers HSBC Holdings Plc, Royal Bank of Scotland Group Plc and Barclays Plc rose to 1.59%, 1.14% and 0.96% from 0.02%, negative 0.54% and 0.78%, respectively.

UniCredit SpA, which completed the €3.55 billion sale of asset management unit Pioneer Global Asset Management during the period, among other disposals, had the second-highest RoRWA of 3.27% at Sept. 30 among banks in the sample, up from 0.56% in the same period in 2016.

In contrast, Wells Fargo & Co.'s RoRWA declined to 1.46% at September-end from 1.67% a year earlier. Also posting declines were Société Générale SA, to 1.24% from 1.38%; and Banco Santander SA, to 1.17% from 1.40%.

Meanwhile, global regulators have finalized the revised Basel III framework, dubbed "Basel IV," which will mean large European banks will have to book more capital against risky assets.

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