A European state intelligence report reviewed by Reuters warns that Russia is at risk of an “explosive” banking crisis as lenders increasingly absorb pressures created by the war economy. The report argues that while Russia has used banks to support defense-linked businesses and homebuyers, state-backed credit programs and loan restructurings can mask growing underlying risks.

The report cites indicators suggesting a deterioration in credit quality. It says around 10% of corporate loans are doubtful, retail non-performing loan ratios reached 15% in 2025, and more than 500,000 Russians declared bankruptcy last year—up by almost a third from 2024. It also links the risk buildup to broader economic stress, including disruptions tied to repeated infrastructure strikes that complicate fuel distribution in critical regions.

The report comes as the European Union prepares an additional round of sanctions. It also notes that Russia’s central bank has rejected the severity of the threat, with a deputy governor dismissing concerns as “not critical” and pointing to a capital cushion that stands at a three-year high.

Even so, the intelligence warning frames the combination of war-driven lending pressures, masked credit stress, and the potential effects of further sanctions as a scenario that could push the Russian financial system toward a crisis.