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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.
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