According to the most recent issue of the Bundesbank’s Monthly Report, German credit institutions recorded a strong improvement in performance in 2021 compared with the year before. Profit for the financial year before tax was up €12.8 billion, hitting almost double the previous year’s figure at €27.1 billion – a development which the report primarily attributes to the fact that banks significantly scaled back their risk provisioning compared with 2020 and also released some of the risk provisions that they had formed that year. However, the current year could see the profitability of German banks dampened, in particular, by the repercussions of the Russian war of aggression on Ukraine. The report explains that this might increasingly impair economic growth, which would increase the likelihood of credit losses.