Piraeus Financial Holdings: 2025 EBA Stress Test Results
Piraeus Financial Holdings SA ("Piraeus" or “Piraeus Group”) was subject to the 2025 EU-wide stress test conducted by the European Banking Authority (EBA). The 2025 EU-wide stress test was conducted on a large sample, covering 64 EU banks representing broadly 75% of the EU banking sector.
Piraeus Group takes stock of the announcement made today by the EBA on the EU-wide stress test results and fully acknowledges the outcome of this exercise.
The 2025 EU-wide stress test is designed to provide input into the Supervisory Review and Evaluation Process (SREP) for competent supervisory authorities. The exercise assesses the performance of banks under a baseline and adverse scenario during the period 2025-2027.
The baseline scenario for EU countries is based on the projections from the national central banks as of December 2024. The adverse scenario is based on a narrative of hypothetical worsening of geopolitical tensions, with large, negative, and persistent trade and confidence shocks having strong adverse effects on private consumption and investments, both domestically and globally. In terms of scenario severity, the 2025 EU-wide stress test, features one of the most severe cumulative GDP declines assumed compared to the previous EU-wide stress test exercises, with a three-year cumulative reduction in Greek GDP of -6.1%.
In line with the methodology, the stress test has been carried out applying a static balance sheet assumption as of December 2024, and therefore does not take into account future business strategies and management actions, which would typically act to mitigate the impact. It does not constitute a forecast of Piraeus Group profits, under its current strategy, as elaborated via the Group’s Business Plan and as also outlined in the Group’s ICAAP.
The Bank applied very conservative assumptions across all Stress Test elements under the adverse scenario. The additional capital shocks / deductions that the Bank incorporated, over and above the strict requirements of the prescribed EBA ST Methodology, are outlined below:
- Acceleration of DTC amortization
- Assumed 50% dividends pay-out in profit-making years under the adverse scenariο
both in line with the relevant projections under the Bank's business plan.
The Common Equity Tier 1 ratio (CET1 ratio) resulting from the stress test for 2027, the final year considered in the exercise, is illustrated below:
|
|
CET1 Ratio |
|||
|
|
2024 |
2024 |
2027 |
Delta |
|
14.5% |
14.0% |
15.8% |
+1.8% |
|
14.5% |
14.0% |
11.8% |
-2.2% |
* CET1 Ratio restated for CRR III implementation
The baseline scenario is capital accretive by 184bps versus December 2024, after accounting for the distribution of dividends to Piraeus shareholders.
The adverse scenario results in a depletion of 222bps for the three-year period, after accounting for the payment of dividends to Piraeus shareholders. The respective depletion in the 2023 Stress Test Exercise was 241bps.
The Piraeus’ results of the 2025 stress test exercise imply a material improvement compared to the 2023 and 2021 stress test exercises, as displayed below:
|
|
Maximum Depletion |
CET1 Ratio end-period (Adverse) |
|
Stress test 2021 |
-6.1% |
8.6% |
|
Stress test 2023 |
-3.2% |
9.1% |
|
Stress test 2025 |
-2.2% |
11.8% |
The improved result reflects Piraeus’s continued focus on building a strong capital base and a balance sheet resilient to adverse macroeconomic conditions.
Athens, 01 August 2025