European Intelligence Report Warns Russian Banking System Faces Explosive Crisis as War Economy Strains Lenders

A European state intelligence report prepared in recent weeks and reviewed by Reuters warned that Russia faces an "explosive" banking-crisis risk, cautioning that state support "creates the illusion of a dynamic economy" that could unravel under a shock such as a fresh sanctions package 12. The two-page document, titled "Note on the probability of a banking crisis in Russia in 2026," estimated that 10% of corporate loans are doubtful, up sharply from 2024, with some major banks reporting retail non-performing loan ratios as high as 15% in 2025 12. It also cited more than 500,000 personal bankruptcies in Russia in 2025, up nearly a third year over year, more than 13 million Russians holding at least three simultaneous loans, and cash held outside banks up over 17% year over year to more than 19 trillion roubles ($243 billion) so far in 2026 12. Russia's Economy Ministry cut its 2026 GDP growth forecast to 0.4% from 1.3% and its 2027 forecast to 1.4% from 2.8%, while Russia's central bank declined to comment on the assessment and Deputy Governor Filipp Gabunia said last month that vulnerabilities are "not critical," with corporate bad loans steady at 4% 12. The EU is separately finalizing a 21st sanctions package targeting nearly 90 additional banks and cryptocurrency networks, which would bring sanctioned Russian lenders past 100, more than half of Russia's internationally connected banks 12.