The European Central Bank (ECB) and the European Banking Authority (EBA) published today the results of their 2025 stress test, which shows that the EU banking system is resilient against a severe economic downturn scenario. At the end of the three-year period considered in the stress test, under the adverse scenario, the capital ratio decreases less than in previous stress tests. This more favourable outcome in terms of capital depletion is mainly due to banks entering the exercise with stronger profitability, driven by higher interest rates and stable asset quality. However, the sustainability of higher profits remains uncertain and may differ across banks.
In accordance with Article 180 of the Credit Institutions Act, in 2025, the Croatian National Bank also conducted a comprehensive supervisory stress testing for less significant credit institutions in the Republic of Croatia[1]. Under the adverse scenario, the test results show a decline in the Common Equity Tier 1 (CET1) capital ratio of 58 basis points. Compared with the results of the EU-wide stress test, less significant credit institutions in the Republic of Croatia are, on average, more resilient than EU credit institutions in such hypothetical adverse economic conditions, as they have, among other things, higher initial capitalisation than European banks.
The results suggest that the high capitalisation of Croatian less significant credit institutions, supported by their profitability, ensures sufficient resilience to absorb losses that would result from negative shocks under this year’s stress-testing scenario.
The stress testing conducted by the Croatian National Bank used the methodology of the European Banking Authority, which was further simplified to reflect the nature, type and complexity of the activities of less significant credit institutions in the Republic of Croatia. The stress scenarios used are identical to those used in the European stress test. The adverse scenario is based on the narrative of a hypothetical escalation of geopolitical tensions, pronounced inflationary pressures and an increase in market interest rates, which overall has strong negative effects on private consumption and investment, both at the European and global levels.
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Agram banka d.d., Banka Kovanica d.d., Croatia banka d.d., Hrvatska poštanska banka d.d., Imex banka d.d., Istarska kreditna banka Umag d.d., J&T banka d.d., Karlovačka banka d.d., KentBank d.d., OTP banka d.d., Partner banka d.d., Podravska banka d.d., Samoborska banka d.d., Slatinska banka d.d., Solvera stambena štedionica d.d. ↑