The banking sector in the Czech Republic was sufficiently resistant against potential negative shocks as of the end of Q3 2017.
This stems from the stress tests carried out by the Czech National Bank (CNB) at the end of Q3 2017. The sector’s capital endowment stayed high above the minimum regulatory requirement of 8% even in the stress scenario based on a major drop of economic activity in the Czech Republic and abroad.
The sector’s resistance is based primarily on high capital ratio, which totalled 18.4% as of the end of September, and existing profits. Credit risk remains the biggest risk factor.