Capital ratios strengthened as profit growth outpaced risk-weighted assets.

The capital positions at the world’s biggest banks improved, while their leverage and liquidity metrics were stable, according to the latest review by the Basel Committee on Banking Supervision.

On Thursday, the global regulators group reported that based on data to the end of 2024, the capital positions for all of the largest international banks — the 116 so-called “group 1” banks — met the standards under the fully phased-in global capital rules, known as Basel III.

The common equity tier one capital ratio for the group 1 banks came in at 13.4% at the end of 2024, up from 13.0% in mid-2024.

The improvement in the banks’ capital ratios came as tier one capital grew faster than risk-weighted assets in the second half of last year, it noted.

“Currently, the Tier 1 capital ratios are higher in Europe than in the Americas and the rest of the world,” the report said — however, most of the improvement in the second half came from banks in the Americas, which reported greater profit growth.

The Basel Committee reported that annual after-tax profits rose by 20.4% for the group 1 banks in the Americas, while they were down by 1.4% in Europe, and down 16.4% in the rest of the world.

“… the annual dividend payout ratio has increased significantly in the rest of the world, while it has been stable in Europe and in the Americas,” it noted. “It is significantly below the record high ratios observed in 2019 and 2020 in the Americas, while it is at pre-pandemic levels in Europe and the rest of the world.”

At the same time, the average liquidity ratio for the group 1 banks declined to 134.8% from 135.9% during the second half of 2024, the Basel Committee said. It also noted that three of the largest banks reported liquidity ratios that were below the minimum requirement of 100%.

Additionally, the weighted average net stable funding ratios “remained stable” in the second half for large, internationally-active banks, and all of the banks met the minimum requirement, it said.