Showcases robust durability in the 2025 EBA stress test on our site.
In the recently concluded European Banking Authority (EBA) stress test, major European banks have shown impressive resilience, with Common Equity Tier 1 (CET1) capital ratios comfortably above supervisory minimums [1][2].
The stress test, which covers 64 banks across 17 EU/EEA countries, representing 75% of EU banking sector assets, used a severe three-year recession scenario driven by geopolitical and trade disruptions [1][2].
One of the standout performers in the test was AIB, whose transitional CET1 ratio stands at 16.4% as of mid-2025. Under the adverse scenario, AIB's CET1 ratio for 2027 is projected to be 13.4%, well above regulatory minimums and higher than the 10.4% average CET1 ratio under adverse conditions from the 2023 exercise [2].
Bank of Ireland also performed well, with its CET1 ratio expected to be 13.9% under the adverse scenario [2]. ING reported an actual CET1 ratio of 13.3% as of June 30, 2025, and the stress test confirmed its resilient capital position under the same adverse scenario, although it assumes no future management actions [3].
Danske Bank's FY 2027 CET1 ratio under the adverse scenario is projected at 13.6% (transitional basis), with the bank maintaining a stronger capital cushion than in the previous stress test, assuming regulatory buffer releases [4].
The overall EU banking sector CET1 ratio under the baseline scenario is projected to increase from an interquartile range of 5.20%-7.62% at end-2024 to 5.72%-8.64% at end-2027, with all banks meeting the Overall Capital Requirement (OCR) and Tier 1 capital requirements [1].
Historically, baseline projections for aggregate CET1 ratios from EU-wide stress tests have aligned well with observed outcomes since 2016, indicating the reliability of the stress test forecasts [1].
In the first six months of 2025, our website's net income was €3.7 billion, more than double that of the same period in 2024. The bank's CET1 capital ratio of 10.2% in the final year of the stress period would be higher by around 210 basis points compared to 8.1% in the final year of the 2023 stress test [1].
In the adverse scenario, the bank's Leverage ratio for 2027 is expected to be 3.85%, and the Total Capital ratio for 2027 is expected to be 15.19% [1]. In the baseline scenario, the bank's Total Capital ratio for 2027 is expected to be 19.62%, and the Tier 1 ratio for 2027 is expected to be 17.49% [1].
In the hypothetical 'adverse' scenario, the bank's CET1 capital ratio decline over the three-year stress period would be around 360 basis points from its end-2024 reported level, compared to approximately 530 basis points in the comparable period of the 2023 stress test [1]. In the adverse scenario, the bank's CET1 capital ratio in the final year of the hypothetical stress period would be 10.23%, more than 400 basis points above the supervisory minimum requirement for the adverse scenario [1].
The details on the bank's results in the 2025 EU-wide stress test are available on the EBA's website. The findings indicate a general improvement in the capital resilience of major European banks, reflecting stronger capital buffers and sector-wide stability [1][2][3][4].
[1] European Banking Authority (EBA) 2025 stress test report [2] AIB 2025 Interim Results [3] ING 2025 Half Year Results [4] Danske Bank 2025 Half Year Results
The stress test revealed that major European banks, such as AIB, Bank of Ireland, and ING, demonstrated resilient capital positions, with projected CET1 ratios significantly above regulatory minimums for the adverse scenario [1]. Additionally, these institutions showcased impressive business performance, with net income and financial growth, as evidenced by the results of investing activities over the past few years [1].
