Overview
- A confidential two-page European intelligence assessment prepared in June warns that subsidised lending for defence firms, state projects and households has left Russian banks exposed and could produce an 'explosive' crisis if hit by further external shocks.
- European diplomats are discussing a 21st sanctions package to be finalised in July that could add roughly 90 banks and target cryptocurrency networks used to evade penalties, a move the intelligence note says could trigger acute funding and payment stress.
- The report cites rising indicators of strain, estimating about 10% of corporate loans are doubtful, retail non-performing loan ratios reached as high as 15% in 2025, more than 500,000 personal bankruptcies were recorded in 2025, and cash held outside banks has topped 19 trillion roubles.
- Russian officials and some analysts reject the crisis diagnosis, with central bank deputy governor Filipp Gabunia calling vulnerabilities 'not critical' while some lenders such as VTB have quietly raised reserves to prepare for higher losses.
- If sanctions do tighten, likely effects include deposit withdrawals and a lending squeeze that would hit households and small firms first, weaken state-backed war financing through banks, and test how far Asian trade links and official support can blunt the shock.