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Euro zone banks face rising risks through 2023-French Banking Federation

·1-min read

By Julien Ponthus

PARIS (Reuters) - The hardship brought by economic stagnation and high inflation means euro zone banks will face rising risks in their loan portfolios through 2023, the chairman of the French Banking Federation (FBF) told Reuters in an interview on Tuesday.

"Our scenario is for a gradual rise of risk from the end of this year and for probably the rest of 2023", said Nicolas Thery, also president of Credit Mutuel, a French cooperative lender which posted 4.3 billion euros of profit in 2021.

Speaking on the sidelines of the Medef employers federation's annual post-summer conference, Thery argued that in contrast to other crises, the healthy financial state of the French banking system meant the impact of non-performing loans (NPLs) on balance sheets would be limited.

"NPLs are not an issue for the French financial system", he said, adding that the country's real estate sector was particularly healthy.

(Reporting by Julien Ponthus, editing by Tassilo Hummel)