Press releases Results of the 2025 EU-wide banking sector stress test: Belgian banks KBC and Belfius demonstrate resilience amid uncertainty, underlining the importance of[...]

The EBA published today the detailed results of a stress test of the EU's 64 largest banks, 51 of which are established in the euro area and are subject to direct supervision by the European Central Bank (ECB). The EU-wide stress test covered 75% of the EU banking sector, including the Belgian banks Belfius and KBC Group. ING Belgium and BNP Paribas Fortis, which are subsidiaries of foreign banking groups, were included in the stress test through their parent institutions.

The objective of the EU‐wide stress test was to provide supervisors, banks and market participants with a common analytical framework with which to compare and assess the resilience of large EU banks and the EU banking system to a number of hypothetical adverse economic shocks. The stress test contained a baseline scenario and an adverse scenario, both of which had a three-year projection horizon. The assumptions underpinning the macroeconomic variables used in the baseline scenario were in line with the ECB's December 2024 economic projections. The adverse scenario, designed by the ECB and the European Systemic Risk Board (ESRB), was a hypothetical one, reflecting the systemic risks considered as posing the greatest material threat to the stability of the EU banking sector at the start of the test in January 2025.[1]

The estimated impacts of the adverse scenario should not be considered as projections of bank profitability, given that the scenario used was hypothetical. In addition, the results under this scenario do not factor in the potential response of banks to shocks, as the stress test was based on the assumption of a static balance sheet. Under this assumption, banks are able to renew maturing assets and liabilities. Hence, scenarios that imply short-term liquidity shortages or a credit crunch fall outside the scope of the projections. Nevertheless, the 2025 stress test was not simply a compliance check: its results serve as a valuable analytical tool to assess the potential resilience of bank balance sheets to the specific shocks considered.

As was the case for previous stress tests, the 2025 test was designed to be used as an important input in the Supervisory Review and Evaluation Process (SREP). The stress test will thus serve as a supervisory tool, with the results discussed with individual banks in the context of the SREP. It will also allow risk-mitigation measures and potential balance sheet dynamics to be considered.