Official Announcement of the Czech National Bank of 5 March 2026 on the Assessment of the Countercyclical Capital Buffer Rate for the Czech Republic – March 2026

Official Gazette of the ČNB, Issue 2/2026 dated 6 March 2026 1 Sorting Code 2 0 3 2 6 1 8 0 OFFICIAL ANNOUNCEMENT OF THE CZECH NATIONAL BANK of 5 March 2026 on the assessment of the countercyclical capital buffer rate for the Czech Republic – March 2026

I.
Purpose of the Official Announcement

The Czech National Bank (hereinafter referred to as the “ČNB”), pursuant to Section 12o(4) of Act No. 21/1992 Coll., on Banks, as amended (hereinafter referred to as the “Bank Act”) and Section 8al(4) of Act No. 87/1995 Coll., on Savings and Credit Cooperatives and Certain Measures Related Thereto and Amending Act No. 586/1992 Coll., on Income Taxes, as amended (hereinafter referred to as the “Savings and Credit Cooperatives Act”), assesses the level of cyclical systemic risk. Based on this assessment, the ČNB may set or change the countercyclical capital buffer rate for the Czech Republic by issuing a measure of general nature pursuant to Section 12o(6) of the Bank Act and Section 8al(6) of the Savings and Credit Cooperatives Act.

Given that, based on the assessment conducted in March 2026, there is no change in the countercyclical capital buffer rate and therefore no issuance of a measure of general nature, the ČNB publishes the justification for maintaining the countercyclical capital buffer rate for the Czech Republic at its unchanged level through this official announcement.

II.
Justification for Maintaining the Countercyclical Capital Buffer Rate

1. In assessing the level of cyclical systemic risk and deciding on the countercyclical capital buffer rate for the Czech Republic, the ČNB takes into account the indicative countercyclical capital buffer rate calculated pursuant to Section 12o(2) and (3) of the Bank Act and Section 8al(2) and (3) of the Savings and Credit Cooperatives Act, the recommendations issued by the European Systemic Risk Board (hereinafter referred to as the “ESRB”), and indicators that may signal the growth of systemic risk.

2. According to Section 12o(2) and (3) of the Bank Act and Section 8al(2) and (3) of the Savings and Credit Cooperatives Act, the basis for calculating the indicative indicator is the deviation of the ratio of the volume of loans granted to gross domestic product (GDP) from the long-term trend. The value of the ratio of loans granted to GDP in the third quarter of 2025 was 82.8%, and the corresponding deviation from the long-term trend reached -7.1 percentage points. 1 This value corresponds to a reference countercyclical capital buffer rate of 0%. The additional deviation 2, which is based on the ESRB recommendation (Part B, para. 2) and better takes into account the specifics of the Czech economy, reached 0.9 percentage points in the first quarter of 2025 and implies a reference rate of 0%.

1 According to ESRB/2014/1 (Recommendation of the European Systemic Risk Board of 18 June 2014 on guidance for setting countercyclical buffer rates), the volume of loans is considered to be the value of all loans granted to the private sector (non-financial corporations sector, household sector, and non-profit institutions serving households), increased by the volume of bonds issued by the domestic non-financial private sector. For the calculation of the long-term trend of the ratio of the volume of loans granted to GDP, a time series for the period from the fourth quarter of 1995 to the third quarter of 2025 is used, and the Hodrick-Prescott filter with a smoothing parameter (λ) of 400,000. 2 The additional deviation, referred to as the expansive credit gap, is calculated as the difference between the current value of the ratio of bank loans to the gross value added of the private non-financial sector and the achieved minimum of the aforementioned ratio in the last 8 quarters.

Official Gazette of the ČNB, Issue 2/2026 dated 6 March 2026 2

3. In response to the ESRB recommendations, the ČNB has repeatedly emphasized that it does not consider the magnitude of the deviations mentioned in point 2 to be a reliable guide for determining the position of the domestic economy in the financial cycle and for setting the countercyclical capital buffer rate. The ČNB prefers an approach based on a comprehensive assessment of the development of indicators signaling the growth of systemic risk pursuant to Section 12o(4) of the Bank Act and Section 8al(4) of the Savings and Credit Cooperatives Act. 3

4. The main monitored indicators include the Financial Cycle Indicator (FCI). Its continued growth confirmed that the Czech economy has moved further into the growth phase of the financial cycle. The development of the FCI was driven primarily by the growth in the volume of net new loans granted to households for housing and consumption. In December 2025, their monthly volume exceeded 31.8 billion CZK and 11.3 billion CZK, respectively, and was thus above the average from 2015–2024. The volume of loans drawn by non-financial corporations also strongly influenced the FCI, which in December 2025 exceeded 130 billion CZK. The development of new loans was reflected in the year-on-year growth rate of the outstanding loan balance and overall contributed to an increase in the indebtedness ratio of households by bank loans, but not of non-financial corporations, for which the value decreased in the third quarter of 2025. 4 The development of the FCI was also influenced by residential property prices, which rose rapidly in 2025, with transaction activity in the market for these properties exceeding the 10-year average. 5

5. The total volume of systemic cyclical risks in bank balance sheets can still be viewed as relevant, including in relation to the actual formation of loan loss provisions and the ratio of loan loss provisions to total loans. The updated estimate of the volume of potential unexpected cyclical credit losses increased to 23.4 billion CZK. A source of systemic risk may also be the potential increase in risk weights for bank loan portfolios using the IRB approach, in the event of a more significant deterioration of the economic situation with systemic consequences. A deterioration of risk parameters due to significantly unfavorable developments would lead to their increase and indirectly also to an increase in the capital requirement in absolute terms. The countercyclical capital buffer should also cover this potential increase. The amount of capital needed to cover the decline in the capital ratio due to the possible cyclical increase in risk weights is estimated by the ČNB to be 23.4 billion CZK. The total additional capital needed to cover unexpected cyclical credit losses and the increase in risk weights is therefore 46.8 billion CZK, which corresponds to a countercyclical capital buffer rate of 1.5%.

6. Based on the above assessment, the Banking Board of the ČNB decided, in the interest of preserving the resilience of the banking sector, to maintain the countercyclical capital buffer rate at 1.25%, which was established through Measure of General Nature II/2024 of 6 June 2024. 6 In its decision, it took into account the results of quantitative methods and the overall assessment of the current growth phase of the financial cycle. The Czech economy is operating close to its potential, households and businesses remain financially healthy at the aggregate level, and in an environment of positive real interest rates and persistent global geopolitical uncertainties, they are rather cautious. 7 Banks, meanwhile, are not broadly relaxing their credit standards or credit risk management. The Banking Board agreed that there are already clearer signs of increasing cyclical risks on the outlook, and further movement of the economy

3 ČNB Methodological Framework for Setting the Countercyclical Capital Buffer Rate is presented in the document ČNB Approach to Setting the Countercyclical Capital Buffer Rate.
4 As of 31 December 2025, the year-on-year growth rate of bank loans to households for housing was 8.3% and for consumption 10.8%. The volume of bank loans to non-financial corporations as of 31 December 2025 increased year-on-year by 4.3%. The ratio of bank loans to households to their annual gross disposable income as of 30 September 2025 was 50.4%. The ratio of bank loans to non-financial corporations to their annual gross operating surplus as of 30 September 2025 reached 73.6%, which is less than 1 percentage point lower than in the previous quarter.
5 The year-on-year change in the house price index (HPI) was 10.8% as of 30 September 2025.
6 A measure of general nature is available on the ČNB website: Measure of General Nature II/2024 of 6 June 2024.
7 The three-month default rate for household housing loans was 0.21% in the third quarter of 2025 (historical minimum from 2021 and 2022 is 0.12%), for household consumption loans 0.73% (historical minimum from 2020 is 0.63%), and for loans to non-financial corporations 0.16%, which is a new historical minimum.

Official Gazette of the ČNB, Issue 2/2026 dated 6 March 2026 3 into the growth phase of the financial cycle may open a discussion on increasing the CCyB rate.

7. The circumstances and conditions described in points 4 to 6 give the ČNB room to evaluate further macro-financial developments in light of domestic and global uncertainties and the risks of the ČNB’s winter forecast. If the economy continues to shift in the growth phase of the financial cycle, the ČNB is prepared to increase the countercyclical capital buffer rate, with the probability of this step having increased. In the event of a significant deterioration of the economic situation and the emergence of significant unexpected credit losses in the domestic banking sector, the ČNB is prepared to significantly reduce the countercyclical capital buffer rate, or even release this reserve entirely, with the aim of supporting smooth lending to the real economy.

III.
Final Provisions

This official announcement was published on 6 March 2026.
Member of the Banking Board:
PhDr. Jakub Seidler, Ph.D. (signature)
Financial Stability and Restructuring Section