France's six leading banking groups have benefited from the sharp improvement in economic conditions in 2021 following the shock of the Covid-19 pandemic: they recorded record results, owing in particular to a sharp increase in revenues, the quality of their credit portfolios continued to improve and their prudential position strengthened, increasing their resilience.
Despite solid results in the first quarter of 2022, French banks face many challenges in an environment of renewed uncertainty fueled by the war in Ukraine and China's response to the resurgence of the pandemic.
Although their direct exposures to Russia and Ukraine are limited, French banks are now operating in a degraded macroeconomic environment characterised by heightened inflation, rising interest rates and declining growth prospects. The 2021 stress test conducted by the European Banking Authority on the basis of very severe scenarios nevertheless underlined the resilience of European and French banks in particular, given their high capital levels.
The worsening economic climate must not obscure other areas of attention, such as the resilience of IT infrastructures to cyber risk and the integration of climate change risks into banks’ management systems.