Report on Certain Taxonomy Key Performance Indicators and Other Aspects of the Disclosures Delegated Act under Article 8 of the Taxonomy Regulation (European Banking Authority)

Summary

• Total fees and commissions income in the analyzed EU banking sector sample reaches approximately EUR 157 billion, representing 37% of net operating income.p.17
• Services covered under the Fees and Commissions KPI generate approximately EUR 94 billion, which accounts for 60% of total fees and commissions income.p.17
• Restricting the Fees and Commissions KPI to four capital markets-related activities reduces its aggregate share of net operating income to 5.9% across 125 analyzed banks.p.19
• The gross carrying amount of total assets held for trading in the EU/EEA banking sector is EUR 5 trillion, representing 22% of total assets.p.24
• A total of 21 credit institutions (17% of institutions subject to CSRD) hold a trading portfolio larger than 10% of their total assets.p.25
• Gross revenue from investment services within the scope of Taxonomy disclosures totals EUR 8.7 billion, with EUR 1.6 billion arising from dealing on own account activities.p.31
• Investment firms generate EUR 7 billion in total annual gross revenue from non-proprietary services, with portfolio management accounting for 90%.p.31

Key insights

1. The EBA advises the European Commission to remove the Fees and Commissions KPI from Taxonomy disclosure requirements due to limited decision-usefulness and significant operational burdens.p.8
2. The EBA recommends deleting the Trading Book KPI because of its low informative value regarding long-term sustainability strategy and high operational complexity.p.8
3. The EBA recommends narrowing the scope of the investment firms' 'other services' KPI to four core activities directly linked to capital markets.p.8
4. The EBA advises allowing unlimited grandfathering at origination for use-of-proceeds financial instruments such as loans and advances.p.8
5. The ESAs advise against allowing financial undertakings to voluntarily use counterparty OpEx disclosures due to added reporting complexity and reduced comparability.p.9
6. Group-level Taxonomy disclosures should determine the primary reporting regime based on the nature of the parent undertaking rather than aggregating different activities into a single combined KPI.p.9
7. The Omnibus simplification package refocused Taxonomy disclosure rules on undertakings with more than 1000 employees and a net turnover of at least EUR 450 million.p.10
8. Aligning grandfathering rules with the EU Green Bond Standard across all financial exposures requires establishing clear distinction between allocated and unallocated proceeds.p.36
9. The EBA suggests harmonizing disclosure methodologies and templates across asset manager KPIs, off-balance sheet AuM KPIs, and investment firm service KPIs.p.44