EBA: stress tests of European banks have shown their resistance

This year's stress tests of European banks indicate that they should be resistant to the adverse scenario of long -term deterioration of macroeconomic conditions – EBA European bank supervision said, which conducted tests. Pekao reported that it was again at the forefront of the most resistant banks.

The study covered 64 banks. The script analyzed in stress tests assumed a violent and long -lasting deterioration of the global macroeconomic environment, caused by geopolitical tensions, especially in the Middle East, and an increase in protectionism around the world, including imposing new duties. The script provided for an increase in inflation, a recession in the EU, greater unemployment and a decrease in asset valuation. 6.3 percent were founded recession in relation to the level of 2024 and an increase in unemployment by 5.8 percentage points

According to EBA on Friday, the results indicate that the European banking system would be able to support the economy and credit business and households in such conditions, even despite the assumed losses of EUR 550 billion over three years. Even in such adverse conditions, all banks would meet the requirements for their capital structure at the end of the 3-year perturbation period. Resistance is measured as a difference of the consolidated Tier 1 (CET1) primary capital coefficient without the use of transitional provisions between the assumed starting point in 2024 and the stress scenario for 2027.

Among Polish banks, the study covered PKO BP and Pekao. As Bank Pekao informed, it turned out to be the most resistant bank in stress EBA tests. – EBA extreme tests are a very important test for us, as we are prepared for crises and macroeconomic turmoil. Unfortunately, recent years have not saved this kind of anxiety, which is why the resistance of financial institutions, crucial for the stable functioning of the entire economy, is so important – said the president of Bank Pekao, Cezary Stypułkowski, quoted in the bank's announcement.

This year's results have shown that the consolidated CET1 without the use of transitional provisions of Bank Pekao would be in 2027 at 20.03 percent. in the base scenario with a 3-year profit of 3.78 billion euros and 17.03 percent. in an extreme scenario with a 3-year profit of EUR 2.02 billion. Both capital indicators are significantly above the levels required by the regulator and target capital indicators – emphasized the bank.

According to the Polish Financial Supervision Authority, the results of European stress tests confirm that the materialization of the shock scenario, assuming, among others The increase in interest rates does not pose a threat to the stability of Polish banks.

According to the PFSA, the situation of the Polish banking sector has remained stable in the last quarters. Persistent increased interest rates affect the generation of record interest results by banks, which translates into a historically high net result. Thanks to the intensification of banks in the scope of the settlement solving the problem of currency housing loans, as well as progressing lawsuits, the materialization of the legal risk associated with this portfolio increasingly affects the results of banks – the Commission assessed.

“The consistent and conservative dividend policy and the decisions of banks in this area have enabled the construction of appropriate capital buffers, which even in crisis situations, such as Covid -19 Pandemia or the outbreak of war in Ukraine, provided by the PFSA, ensure stable functioning of banks” – emphasized KNF. (PAP)

WKR/ Mick/