EU Intelligence Warns of Russian Banking Crisis in 2026

Russia's banking sector could face an “explosive" crisis in 2026 as financial institutions shoulder an increasing share of the costs of the country's war economy, according to a report by a European intelligence service obtained by Reuters. The document was prepared as briefing material for European Union officials ahead of discussions on the bloc's 21st package of sanctions.

The report warns that deteriorating credit quality and rising household debt are increasing banks' vulnerability to additional Western sanctions. According to its authors, state-backed lending programs, debt restructurings and government support have created the appearance of a resilient economy while masking growing financial risks.

The assessment estimates that 10% of corporate loans are already non-performing, while some large banks reported non-performing consumer loan ratios of up to 15% in 2025. More than 500,000 Russians filed for bankruptcy last year, and more than 13 million people now have at least three outstanding loans.

Russia's central bank declined to comment on the report, although senior officials have downplayed the risk of a systemic banking crisis in recent weeks. Meanwhile, European diplomats are discussing a new sanctions package targeting banks, cryptocurrency networks, drone manufacturers, oil traders and refineries.

(Reuters, bak)