84. Areas for analysis by competent authorities may include: a. profit and loss: competent …

Areas for analysis by competent authorities may include:

• a. profit and loss: competent authorities may assess the underlying profitability of the investment firm (after exception items and one-offs), the breakdown of income streams, the breakdown of costs, impairment provisions and key ratios (including cost/income net profit margin, net cash-flow);
• b. the balance sheet: competent authorities may assess the asset and liability mix, the funding structure, the change in the own funds and own funds requirements, and key ratios (including return on equity, Core Tier 1, funding gap);
• c. concentrations: competent authorities may assess concentrations in the P&L and balance sheet related to customers, sectors and geographies; and
• d. risk appetite: competent authorities may assess the formal limits put in place by the investment firm (notably trading limits) and its adherence to them to understand the risks that the investment firm is willing to take to drive its financial performance.

4.5.2 Qualitative analysis

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA -

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