Economy bank stress test
Deutsche Bank and Commerzbank are improving their resilience to crises
As of: 8:39 p.m. | Reading time: 2 minutes
Stress test passed: Commerzbank and Deutsche Bank perform better than before
Source: dpa/Frank Rumpenhorst
Tougher tests and still doing better: Deutsche Bank and Commerzbank have increased their core capital ratios for crisis situations. In the event of an economic downturn, they would be in a better position than they were two years ago. This is the conclusion reached by the European Banking Authority in the current stress test.
Deutsche Bank and Commerzbank fared better in the European Banking Authority (EBA) stress test than they did two years ago. DZ Bank, on the other hand, was hit much harder. This emerges from the results of the latest bank stress test, which the EBA published on Friday evening.
Accordingly, in the event of the simulated economic downturn coupled with various other stress factors, Deutsche Bank’s core Tier 1 capital ratio would fall from almost 13.4 percent at the end of 2022 to almost 8.1 percent at the end of 2025, as the EBA announced on Friday evening with the results of the latest bank stress test. In the previous test, the ratio of common equity Tier 1 capital – a buffer for times of crisis – was even stronger within three years and dropped to around 7.4 percent.
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Commerzbank got off even lighter this time. In the simulated crisis with an economic downturn, rising unemployment and higher inflation, their common equity tier 1 ratio fell from around 14.1 percent at the end of 2022 to around 9.5 percent at the end of 2025. In the previous stress test in 2021, Commerzbank’s core capital ratio shrank from 13.2 to 8.2 percent.
“Despite massively tightened scenarios, we have significantly improved our result this year,” Commerzbank risk director Marcus Chromik told the Reuters news agency.
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Things went much worse this time for DZ Bank, the leading cooperative institute. In the current stress test, your hard core capital ratio fell from 13.5 to 7.0 percent. In the previous test, the institute was significantly better at 10.2 percent in the event of a crisis.
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DZ Bank pointed out that it would have done better under the new IFRS 17 accounting standard, which has been in force for it since 2023. Then their hard core capital ratio would have shrunk from 15.1 to 9.0 percent. From the bank’s point of view, the results confirm the “good capital situation of the DZ Bank Group”.
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