Bank Sector Outlook 2027: High Supply Meets a Changing Financial Landscape (ING Think)

Summary

• EUR bank bond supply is projected to reach €450bn in 2027, driven primarily by elevated redemptions across segments.p.2
• Sustainable bank bond issuance is expected to increase by 7.5% from 2026 to reach €100bn in 2027.p.2
• EUR AT1 supply is forecast to rise to €20bn in 2027, while EUR Tier 2 issuance is expected to reach €35bn.p.2
• European bank M&A deal value reached €53bn year-to-date in 2026, surpassing total transaction volume for 2025.p.13
• Global stablecoin market capitalisation has grown by US$250bn over five years to exceed $300bn.p.26
• Regulatory ring-fencing rules currently lock up €225bn of capital and €250bn of liquidity within European bank subsidiaries.p.17
• Solvency II amendments entering into force on 30 January 2027 will introduce revised capital charges and liquidity buffer rules for insurers.p.2

Key insights

1. Nearly €400bn of European bank bonds mature in 2027, representing the highest annual redemption volume in a decade.p.3
2. Covered bond redemptions are projected to reach a historic peak of €186bn in 2027.p.3
3. Issuance under the European Green Bond Standard expanded from €2.5bn to almost €12bn year-to-date in 2026.p.8
4. Pending or intended European banking M&A deals total €39bn, including Intesa Sanpaolo's potential €34bn bid for Banca Monte dei Paschi.p.13
5. NatWest Group's purchase of Evelyn Partners created the UK's largest private banking and wealth management business while expanding fee income by 20%.p.15
6. US dollar-backed tokens account for 99% of total stablecoin market capitalisation worldwide.p.26
7. Research indicates that deposit substitution caused by stablecoin adoption could reduce European bank lending to corporate borrowers by 0.2%.p.28
8. The European System of Central Banks recommended eliminating the requirement for stablecoin issuers to maintain reserve deposits at commercial banks.p.29