Eurozone banks face growing risks through 2023-FBF

PARIS, Aug 30 (Reuters) – Eurozone banks will face a gradual rise in credit risk from the end of the year and throughout 2023 due to the difficulties associated with economic stagnation and inflationary pressures, said Tuesday the president of the French Banking Federation, Nicolas Théry.

“Our scenario is that of a gradual increase in risk (of credit, editor’s note) at the end of this year and probably throughout 2023”, declares Nicolas Théry, who is also president of the mutual banking group Crédit Mutuel, in an interview with Reuters on the sidelines of the Meeting of French Entrepreneurs (LaREF, former Medef University).

For Nicolas Théry, there is a clear risk of recession for the euro zone whose economic growth should, according to him, be zero for the next six to nine months and where inflation should be between 6% and 8% in the next twelve months.

Unlike previous crises, the financial situation of French banks is sound, which should allow the impact of bad debts on their balance sheet to be limited, underlines the boss of the FBF.

“The situation of French banks is particularly solid (..) bad debts are not an issue for the French financial system”, declares Nicolas Théry.

According to him, the economic slowdown will mean that the results of French banks will not be as good in 2023 as this year.

This summer, BNP Paribas, Société Générale and Crédit Agricole reported results above expectations in the second quarter thanks to the dynamism of their activities both in the financial markets and in retail banking. (Report Julien Ponthus, French version Matthieu Protard, edited by Sophie Louet)