Web Desk: A European intelligence report has warned that Russia could face a major banking crisis in 2026 as the financial burden of its wartime economy increasingly shifts onto the country's banking sector.

According to foreign media reports, the assessment says Russian banks are under mounting pressure due to subsidized lending for the defense sector, housing loans, and government-backed development projects.

The report states that rising household debt and an increasing number of personal bankruptcies have further weakened Russia's financial system.

It adds that around 10 percent of corporate loans are now considered at risk, while lending rates at some major Russian banks have climbed to as high as 15 percent. The report also claims that nearly 500,000 Russians declared bankruptcy in 2026.

According to the assessment, government financial support, loan restructuring, and state-backed guarantee programs are temporarily helping banks cope with mounting financial stress but do not resolve the underlying structural challenges.

The report notes that while the European Union is preparing additional sanctions against Russia, some analysts believe the country's economy remains resilient due to high defense spending, strong state control, and expanding trade ties with Asian countries.

Meanwhile, the Central Bank of Russia rejected the report's findings, insisting that Russian banks remain well-capitalized and that weaknesses in the financial sector are not as severe as suggested.