A European intelligence report warns of an impending banking crisis in Russia.Image: keystone
EU sanctions could hit Russia’s banks harder than previously thought. Subsidized loans and increasing defaults are putting increasing strain on the system.
Jul 7, 2026, 3:41 amJul 7, 2026, 3:41 am
A European intelligence report warns of an impending banking crisis in Russia. “The situation gives the appearance of a dynamic economy,” says the two-page report available to the Reuters news agency on Mondaywhich is supposed to inform European government representatives about the state of Russian banks. What is actually being concealed is an “explosive situation” that could be triggered by an economic shock such as a comprehensive package of sanctions against the banks.
The warning comes as the European Union is preparing a 21st sanctions package. According to an insider, this will also be directed against banks and cryptocurrency networks and will be completed in July.
According to the report, entitled “Note on the likelihood of a banking crisis in Russia in 2026,” banks were pressured to provide subsidized loans to defense companies and property buyers. The authors estimate that ten percent of corporate loans are at risk of default. In addition, some major banks reported a rate of non-performing private loans of up to 15 percent last year.
The report also points out that more than 500,000 Russians would have filed for personal bankruptcy in 2025 – almost a third more than in the previous year. Government programs also encouraged more than 13 million people to take out at least three loans at the same time.
Experts: Asia ignores sanctions
The Russian central bank, which declined to comment, had recently downplayed the risks. The “vulnerabilities in the financial sector are not critical,” said deputy central bank chief Filipp Gabunija in June. He emphasized that the banks’ capital buffer was at its highest level in three years.
Experts also do not see an imminent crisis looming. “Russia’s economy is stagnating, but due to state dominance and high defense spending, there is no immediate financial crisis,” said Chris Weafer, Russia expert at consulting firm Macro Advisory. The idea that a new round of sanctions will plunge Russia into a crisis is wishful thinking because Asia is ignoring the sanctions.
Taras Skvortsov, chief financial officer of Sberbank, Russia’s largest bank, told Reuters that everyone had now gotten used to the sanctions. The EU has imposed wide-ranging sanctions since Russia’s invasion of Ukraine in 2022. However, the US under President Donald Trump has relaxed some of them.