Bank of Cyprus improves EU stress test

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The Bank of Cyprus announced the successful completion of the EU-wide stress test for 2023 with improved results.

According to the bank, the results show the Group’s “resilience under adverse conditions and its ability to maintain organic profitability and sufficient capital even under extreme macroeconomic assumptions”.

“The outcomes for the Group, and its resilience to the parameters of the adverse stress test scenario, have shown significant improvements compared to the corresponding exercise in 2021,” the bank said in a statement.

Under the adverse scenario, the capital depletion of the CET1 FL ratio over the 3-year horizon is in the range of 300 to 599 bps, compared to 600 to 899 bps in the 2021 stress test, and compares well with the average 480 bps for the 98 ECB stress-tested banks, it added.

The CET1 FL, as at the end of 2025, is in the range of 8% to 11% and is above the bank’s capital requirements.

The bank notes that the test is not a “pass-or-fail” exercise, and no threshold is set to define the failure or success of EU banks, but it is designed to be used as an important input in the Supervisory Evaluation Process (SREP).