Czech National Bank stress tests show banks can endure severe recession

The Czech National Bank (ČNB) released results of its supervisory stress tests, which used the European Banking Authority methodology and covered 13 domestic banks representing about 92 % of the Czech banking sector’s assets. The tests evaluated credit, market and operational risks over a three‑year horizon.

In the baseline scenario, the consolidated capital ratio of the tested banks stood at 20.7 % at the end of 2025. Even under an adverse scenario that assumes a sharp drop in economic activity from 2026 to 2028, the ratio would only fall to 18.4 %, remaining comfortably above the regulatory minimum. The ČNB concluded that the sector possesses a robust capital buffer and would be able to withstand a pronounced recession.

The stress‑testing programme, ongoing since 2009, is complemented by macro‑stress tests that assess the sector’s resilience based on the ČNB’s internal models.