Bank of Ireland’s CET1 ratio to remain above requirements in EU stress test

Published 01/08/2025, 18:26
Bank of Ireland’s CET1 ratio to remain above requirements in EU stress test

DUBLIN - Bank of Ireland Group plc demonstrated resilience in the 2025 EU-wide stress test conducted by the European Banking Authority (EBA), maintaining capital levels above regulatory requirements even under adverse economic conditions.

The stress test, which covered a three-year horizon from 2025 to 2027, showed the bank would maintain a fully loaded Common Equity Tier 1 (CET1) ratio of 19.5% by 2027 under the baseline scenario. Under the adverse scenario, which assumes a severe economic downturn, the ratio would decrease to 13.7% by 2027, still above the bank’s current CET1 capital requirement of 11.38%.

Bank of Ireland’s peak fully loaded CET1 depletion in this exercise was approximately 290 basis points, an improvement of about 130 basis points compared to the 420 basis point depletion recorded in the 2023 stress test. The bank noted this depletion was 50 basis points better than the EU average.

The EBA stress test, conducted in cooperation with the Central Bank of Ireland, the European Central Bank, and the European Systemic Risk Board, does not contain a pass/fail threshold. Instead, results will be used by regulators as part of the Supervisory Review and Evaluation Process (SREP).

The test was carried out based on a static balance sheet assumption as of December 2024 and does not account for future business strategies or management actions.

Bank of Ireland reported that its pro forma CET1 ratio stood at 16.0% at the end of June 2025.

The bank attributed its improved performance in the stress test to actions taken to enhance its business model and the higher interest rate environment, according to the press release statement.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.