European Central Bank Banking Supervision has imposed an administrative penalty of €6.94 million on Belfius Banque S.A. / Belfius Bank S.A./N.V. for non-compliance with requirements governing the implementation of internal-rating-based models used to measure risk on the bank’s balance sheet. The sanction addresses delays in implementing amended models and failures to ensure proper internal audit testing and validation. Belfius missed the January 2024 deadline to implement new internal models for calculating credit risk parameters and to submit an audit report testing and validating the models. The bank had requested permission in June 2021 to modify outdated models and, once approved by the ECB, was required to implement the changes by January 2024 and have its internal audit function test and validate them; the breach lasted from January 2024 to March 2025. The ECB classified the breach as “severe” and applied its public guide for setting pecuniary penalties. Belfius may challenge the decision before the Court of Justice of the European Union.
European Central Bank - Banking Supervision 2025-07-18
European Central Bank imposes €6.94 million penalty on Belfius for internal model implementation and audit breaches
The European Central Bank Banking Supervision has fined Belfius Banque S.A. €6.94 million for failing to comply with internal-rating-based model requirements for risk measurement. The penalty addresses delays in implementing updated models and inadequate internal audit testing and validation, with the breach classified as "severe." Belfius may contest the decision at the Court of Justice of the European Union.