European Banks Maintain 12.1% CET1 Ratio in 2025 Stress Tests; Banco BPM Reports Strong Q2 Earnings

European banks demonstrated resilience in the 2025 stress tests conducted by the European Banking Authority (EBA) and the European Central Bank (ECB), which simulated the impact of severe international trade shocks. The stress test covered 64 lenders, whose main capital ratio declined by 3.7 percentage points to 12.1% under the adverse scenario, remaining above the 12% solvency threshold. The euro area banking sector's strong profitability was highlighted as a buffer against projected losses, enabling banks to continue paying dividends and repurchasing shares. French banks, including BNP Paribas and Crédit Agricole, showed structural resilience, although some lagged behind the European average CET1 ratio of 12%. Banco BPM reported second-quarter 2025 earnings with revenues of €1.55 billion, net interest income of €785.1 million, net fees of €630.3 million, and net profit of €703.8 million. Its CET1 ratio stood above 13.3% at the end of June, and the bank confirmed its 2025 net result guidance. Banco BPM’s profit exceeded forecasts, partly due to the Anima boost after UniCredit withdrew its bid. BPCE also reported solid results and is accelerating its European expansion.