Czech central bank increases countercyclical capital buffer rate as lending strong (updated)

Erste Bank AG

04/06/2026 14:26

Adds quote in paragraph 3-4, details on mortgage lending and stress testing from paragraph 7
PRAGUE, June 4 (Reuters) - The Czech National Bank (CNB) increased its countercyclical capital buffer for banks on Thursday due to strong lending activity, rising household and corporate debt, and ongoing growth in apartment prices.
The bank said factors were "contributing to a further build-up of cyclical systemic risks associated with the growth phase of the domestic financial cycle."
CNB board member Jakub Seidler said an increase in cyclical risks had been observed while broad-based lending activity was expected to continue.
"In such an environment, we consider it necessary to slightly increase the countercyclical capital buffer rate in order to maintain the high resilience of the domestic banking sector," he said.
The countercyclical capital buffer (CCB) is among capital layers that banks must keep to cover risks of losses triggered by various developments or fluctuations in lending.
With the bank's decision, the CCB rate will rise by 25 basis points to 1.50% from July 2027. 
 The bank, at a meeting on financial stability, also decided to leave rules for mortgage lending - which set limits on loan-to-value ratios - unchanged, as well as its 0.5% systemic risk buffer rate, it said in a statement.
It said both the number and volume of new mortgages exceeded long-term averages in the first quarter. At the end of 2025, residential property price growth reached 10%.
Seidler said new limits on investment properties, decided previously, would help curb risks in banks' portfolios.
Stress testing on individual segments of the financial sector showed their resilience to adverse economic developments, the bank said also, supporting the stability of the financial system as a whole. 
The key banking sector is well capitalised, the CNB said.
    

 (Reporting by Jason Hovet and Jan Lopatka, Editing by Louise Heavens)
 ((jason.hovet@thomsonreuters.com;))