The Central Bank of Slovenia published the results of supervisory micro stress tests run under the European Central Bank and the European Banking Authority and its own macro stress tests, concluding that the Slovenian banking system remains stable with sufficient capital adequacy under both baseline and adverse scenarios over 2025 to 2027. It nevertheless highlighted heightened geopolitical risk, noting that conditions have worsened since the scenarios were designed and are already weighing on the domestic outlook. The bottom-up micro stress tests covered 96 significant euro area banks, including one significant Slovenian bank, and assessed capital impacts from credit, market and operational risk as well as risks to net interest income. Under an adverse geopolitical scenario featuring GDP contraction, rising unemployment and pressure on real estate prices, banks were projected to incur larger losses than in the 2023 exercise, but with lower capital depletion, largely reflecting stronger starting profitability and stable asset quality, while profitability sustainability remains uncertain. The central bank reported similar findings for smaller Slovenian banks and savings banks tested using a comparable methodology. The top-down macro stress tests, based on end-2024 data, applied a baseline drawn from the central bank’s December 2024 projections and an adverse scenario combining GDP decline with a temporary inflation rise linked to geopolitical tensions and higher interest rates, with results again pointing to system stability and adequate capital, alongside a call for continued prudence in capital planning and stronger operational resilience including IT and cyber resilience investment.

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