A new analysis released by the European Banking Authority (EBA), in conjunction with the European Central Bank (ECB), demonstrates that Spanish banks exhibit greater resilience on average compared to their European counterparts. In a hypothetical severe crisis scenario spanning from two thousand twenty-five to two thousand twenty-seven, Spanish banks would experience a capital loss of one hundred and eighty basis points. This is significantly lower than the three hundred and four points projected for the European banking sector as a whole.

This comprehensive evaluation measures the potential capital destruction that major European banks could face during a severe recession, compounded by a notable drop in GDP, rising inflation, and elevated unemployment levels. According to the analysis, the potential losses for the European banking sector in such an adverse context could reach five hundred and forty-seven billion euros.

The EBA’s report highlights an improvement in the financial health of European banks, with a noted rise in profitability and capital ratios over the last two years. These enhancements are coupled with a stable quality of assets, which together provide banks with the ability to weather even the most challenging scenarios anticipated in the coming years. Notably, high net interest income is expected due to the predicted rise in interest rates by the ECB.

Among the Spanish banks assessed, Bankinter emerges as the strongest, with a minimal impact on its capital of just fifty-five basis points. Conversely, Banco Sabadell and Unicaja face significant challenges, with projected impacts of two hundred and eighty-one and two hundred and fifty-nine basis points, respectively. Other major Spanish banks, such as BBVA and Banco Santander, also report impacts below two hundred basis points.