![\"\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/08\/001dfd30-614.jpg\"\/)
<\/p>\nAn EU wide bank stress test has found that the country’s two largest banks currently hold enough capital to withstand an economic shock.<\/p>\n
The European Banking Authority exercise was conducted on a sample of 64 banks from 17 EU and EEA countries, covering 75% of EU banking sector assets.<\/p>\n
The results indicate that the largest EU banks would be resilient to a severe hypothetical stress scenario over a three-year period from 2025 to 2027.<\/p>\n
It assumes a simultaneous and prolonged recession across the EU and other advanced economies, driven by severe global disruptions.<\/p>\n
Under the scenario, the disruptions are caused by escalating geopolitical tension, particularly in the Middle East, and a rise in protectionist trade policies worldwide, including tariffs.<\/p>\n
It concluded AIB’s transitional Common Equity Tier 1 (CET1) capital ratio – an important measure of a bank\u2019s financial strength – would stand at 13.4%.<\/p>\n
While the CET1 capital ratio for Bank of Ireland would stand at 13.9% under the adverse stress test scenario.<\/p>\n
Both are above the average 12% CET1 capital ratio, which is up from the avearge 10.4% in the 2023 exercise.<\/p>\n
AIB\u2019s Chief Financial Officer, Donal Galvin, said the bank\u2019s result of 13.4% fully loaded CET1 in the EBA\u2019s hypothetical adverse scenario “demonstrates our high capital base and capital resilience in the EBA adverse scenario”.<\/p>\n
“AIB continues to be very well-capitalised with a CET1 ratio of 16.4% (1) at H1 2025 which remains substantially in excess of regulatory requirements,” he added.<\/p>\n
<\/p>\n
The EBA said the strong performance of the EU banks in the 2025 stress test “is reassuring, nonetheless, this should not lead to complacency among banks or supervisors”.<\/p>\n
The Director of Banking & Payments Supervision at the Central Bank, Domhnall Cullinan said: “On balance, the scenario in use for the EU area is broadly aligned with the 2023 exercise but the impact of the stress test is milder than the results from that exercise.<\/p>\n
“This is mainly due to banks entering the exercise with stronger profitability, and stable asset quality,” he added.<\/p>\n
Mr Cullinan said despite prevailing uncertainty, “the benefits of resilience built up in recent years are evident, with banks having sufficient capital to absorb the impact of the severe scenario.”<\/p>\n
“Given the uncertainty, there remains a need to maintain and continue to build resilience, both financial and non-financial.”<\/p>\n","protected":false},"excerpt":{"rendered":"An EU wide bank stress test has found that the country’s two largest banks currently hold enough capital…\n","protected":false},"author":2,"featured_media":39399,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-39398","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/39398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=39398"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/39398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/39399"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=39398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=39398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=39398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}