Biznes Fakty
Stress tests of European banks. Pekao one of the most resilient
Stress evaluations conducted across European banks revealed that they should withstand a scenario characterized by a prolonged decline in macroeconomic conditions, as reported by the European Banking Authority (EBA) following this year’s test results. Two banks from Poland participated in the assessment.
The assessment included 64 banks. The scenario examined in the stress evaluations projected a significant and extended downturn in the global macroeconomic landscape, exacerbated by geopolitical tensions, particularly in the Middle East, and a rise in global protectionism, including the introduction of new tariffs. The scenario anticipated escalating inflation, a recession within the EU, increased unemployment, and a drop in asset valuations. A recession of 6.3% compared to 2024 levels and a 5.8 percentage point rise in unemployment were forecasted.
Pekao stands as the most robust bank
As announced by the EBA on Friday, the findings suggest that the European banking sector would be capable of supporting the economy and extending credit to businesses and households even under such circumstances, despite projected losses totaling approximately €550 billion over three years. Even in these challenging conditions, all banks would comply with their capital structure requirements by the conclusion of the three-year turbulent period. Resilience is gauged as the difference in the consolidated Common Equity Tier 1 (CET1) ratio without transitional provisions between the anticipated starting point in 2024 and the stress scenario in 2027.
PKO BP and Pekao were among the Polish banks included in the assessment. Bank Pekao announced that it emerged as the most resilient institution in the EBA stress evaluations. „The EBA stress tests are a significant measure of our preparedness for crises and macroeconomic disruptions. Unfortunately, we have not been spared from such disturbances in recent years, which underscores the importance of the resilience of financial institutions, crucial for the stable operation of the entire economy,” stated Bank Pekao CEO Cezary Stypułkowski in the bank’s press release.
Bank Pekao demonstrated the highest resilience in the EBA stress tests. pekao.com.plThe results from this year indicated that, excluding Bank Pekao’s transitional provisions, the consolidated CET1 ratio would stand at 20.03% in 2027 under a base case scenario with a three-year profit of €3.78 billion, and at 17.03% under a stress case scenario with a three-year profit of €2.02 billion. Both capital ratios significantly exceed the regulatory and target capital ratios, as emphasized by the bank.
KNF: we have sufficient financial buffers
The Polish Financial Supervision Authority assessed that the outcomes of the European stress tests validate that the realization of a shock scenario, which includes an increase in interest rates, does not threaten the stability of Polish banks.
According to the Polish Financial Supervision Authority (KNF), the condition of the Polish banking sector has remained stable in recent quarters. Persistently high interest rates are enabling banks to achieve record interest income, resulting in historically high net profits. The banks’ proactive measures to amicably address the matter of foreign currency mortgage loans, along with ongoing litigations, have diminished the impact of legal risks associated with this portfolio on banks’ performance, the Commission noted.
The consistent and prudent dividend policy maintained by the Polish Financial Supervision Authority and the decisions made by banks in this regard have facilitated the establishment of adequate capital buffers, ensuring the stable operation of banks even in crisis situations such as the Covid-19 pandemic or the outbreak of war in Ukraine.
