BNG Bank update: results European stress test 2021

30 July 2021

BNG Bank was subject to the 2021 EU-wide stress test conducted by the European Banking Authority (EBA), in cooperation with the Dutch Central Bank (DNB), the European Central Bank (ECB), and the European Systemic Risk Board (ESRB). BNG Bank notes the announcements made today by the EBA on the EU-wide stress test and acknowledges the outcomes of this exercise.

The stress test leads for BNG Bank under the baseline scenario to a CET1 ratio of 33.7% at year-end 2020. Projections in the adverse scenario result in a CET1 ratio of 23,5% at year-end 2023. With these results the minimum capital requirements are amply respected.

In contrast to previous years, the stress test methodology entailed also for BNG Bank stress results related to net trading income. In the opinion of BNG Bank this is unjustified because the bank does not have a trading book. Without this additional impact, the CET1 ratio for the base and adverse scenarios would be 34.8% (+1.1%) and 26.2% (+2.7%), respectively.

The 2021 EU-wide stress test does not contain a pass fail threshold and instead is designed to be used as an important source of information for the purposes of the Supervisory Review and Evaluation Process (SREP). The results will assist competent authorities in assessing BNG Bank's ability to meet applicable prudential requirements under stressed scenarios.

The adverse stress test scenario was set by the ECB/ESRB and covers a three-year time horizon (2021-2023). The stress test has been carried out applying a static balance sheet assumption as at December 2020, and therefore does not take into account future business strategies and management actions. It is not a forecast of BNG Bank's profits.

Based on the results of the exercise and under the supervisor’s control, BNG Bank will consider possible management actions for further mitigating the impact under the adverse scenario; assess the impact of the results on BNG Bank’s forward looking capital plans and its capacity to meet applicable prudential requirements; and determine whether any additional measures or changes to the BNG Bank’s capital plan are needed.

The full stress test results can be found on the website of the European Banking Authority.   

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