The UK Supreme Court judgment partially reversing the Court of Appeal ruling on car finance provides widespread relief to the banks affected as it will materially reduce compensation payouts. The FCA redress scheme will further moderate credit pressures.

Stress-test results demonstrate the improvements Italian banks have made in recent years. Capital positions are comfortable, asset quality is robust and profitability is resilient. Record first-half results point to another strong year.

The EU bank stress-test results align with our view that banks’ credit profiles are resilient and would help soften the impact of rising economic and other challenges on credit risk. But risk is skewed to the downside.

Scope Ratings requests comments on its Financial Institutions Rating Methodology by 4 September 2025. The proposed changes to the methodology are not expected to have an impact on outstanding ratings assigned by Scope.

EU banks’ reporting on fully phased-in standardised RWAs under CRR3 following Basel III finalisation shows significant variation in CET1 ratio impacts: from zero to 367bp. We expect banks will have time to adjust.

Italian banks face relatively low asset-quality risks from new US tariffs, although second-round effects could impact profitability.

European bank earnings will remain resilient in 2025, although we expect net interest margins to shrink. Given the low visibility around the impact of trade wars and geopolitics and the uncertain economic environment, risks remain skewed to the downside.

Higher mortgage rates have increased pressure on housing affordability. Longer fixed-rate mortgages periods limit the risk of shocks to the banking system and support the resilience of euro-area mortgage markets.

Competitive pressures have intensified but we still expect French banks’ profits to grow this year, supported by retail and corporate and investment banking. But profitability still lags EU peers, as large operating structures weigh on cost efficiency.

Wednesday, July 23rd 2025 - 3:00 PM (CEST)