The European Banking Supervisory Authority (EBA) and the European Central Bank (ECB), in cooperation with the national supervisory authorities, have subjected 96 European banks to a stress test. The results published today certify good crisis resistance. In the euro area, the hard core capital ratio (CET1-R) falls to 12.0%in the adverse scenario between the end of 2024 and at the end of 2027 by 4.0 percentage points. (For comparison: At the last stress test in 2023, a reduction was 5.0 percentage points to 10.4%). Although the losses from the credit risk have increased compared to 2023, the banks emerge more from the stress scenario than in 2023, which is mainly due to the increased profitability. However, the positive effects of the interest environment of the past few years, which is very favorable for the banks, should not last to this extent. Risks that cannot be quantifiable, for example cyber attacks, and increased global and economic uncertainty are an increasing danger to banks.
Austrian banks: stressed capital rates in European midfield
The five participating banks from Austria are also resistant. In the unit, they end up with a decrease in the capital rate of 3.6 percentage points to 13.0% CET1-R in the European midfield. This means that the decline in the capital quota for Austria is less than in 2023, but only around 0.4 percentage points. Performance is heterogeneous at the individual bank level, but all Austrian banks in the stress scenario meet the legal capital requirements.
“We continue to expect a solid capital base from the banks in times of great uncertainty. The economy will also have to do with unpredictable challenges in the next few years and is therefore dependent on a stable banking sector as a partner,” comments FMA board member Helmut Ettl.
“The current results underline the resistance of the Austrian banking sector,” adds OENB director Thomas Steiner to publish the results. “At the same time, difficult -to -quantifiable cyber risks and geopolitical uncertainties are increasing – so we as supervision we observe the individual risk profiles of the banks with special attention.”
Scenario with a strong economic slump and still high inflation
In the fictional stress test scenario, the supervision assumes a strong economic slump with geopolitical tensions, trade conflicts, higher energy prices and fragmented global supply chains. There is a temporary increase in inflation and market interest rates. Higher credit cases, lower commission income and market fluctuations lead to losses and as a result of falling capital rates of the banks. However, the high starting profitability of the banks has a stabilizing effect. In addition, additional studies were carried out, such as analyzes for the interweaving of counterparties and customs -indicated trade conflicts.
Background information
The euro -wide stress test takes place every two years for the largest European banks and comprises about 83% of the banking sector in terms of balance sheet total. For 51 banks (Austria: Erste Group Bank and Raiffeisen Bank International), the stress test under the leadership of the EBA, for the other 45 smaller banks (Austria: Addiko, Raiffeisenlandesbank Oberösterreich, Volksbanken) under the leadership of the ECB. The individual results of the banks are published on the websites of EBA and ECB. Bawag and Raiffeisen-Holding Lower Austria-Wien were exempt from this exercise due to structural changes.
The results of the stress test flow into the activities of banking supervision at various points, especially in the supervisory review and evaluation process (SREP). This includes, for example, the evaluation of governance, risk management and data quality of the participating banks as well as the so-called “pillar 2 recommendation” (P2G). This is an additional investment reserve that is derived from the individual stress test results and is intended to ensure that the equity can absorb potential losses from stress scenarios. Furthermore, identified deficiencies are followed up in individual banks after the stress test, for example by preliminary examinations.
In addition, the results of the stress test take into account the introduction of the third capital assumption ordinance (CRR3) from January 1, 2025. Until its full effectiveness, the regulation provides for a transition phase by 2033. However, the effects on the participating Austrian banks are limited, both at short notice and in full expansion.
At the same time, OENB and FMA carry out a stress test for those Austrian banks that are not covered by the EU-wide stress test. Aggregated results will be published by the OENB in mid -November 2025 in the Financial Stability Report 50.