European Banks Continue to Shun Defense Industry

European politicians, representatives of the defense industry and the banking sector are calling for an urgent review of rules and procedures to speed up financing for arms manufacturers.

This was reported by Bloomberg.

“Many defense companies have problems with simple things like getting a bank account,” said Florian Seibel, co-founder at Quantum Systems.

According to him, deals are blocked due to internal banking regulations that do not meet current political challenges. The experience of startups shows that the approach of banks in key European markets is not aligned with the current needs of the defense sector.

The European banking system traditionally perceives arms manufacturers as high-risk clients or those that do not meet environmental, social and governance standards.

“Unless a number of tangible levers are pulled,” Europe will struggle to finance a new wave of defense growth, Fabrizio Campelli, a top executive at Germany’s biggest lender, Deutsche Bank AG, said at a recent conference in Frankfurt.

He emphasized that Europe needs to simplify and unify financing processes, making the defense sector “more bankable.”

Patrick Schneider-Sikorsky, partner at NATO Innovation Fund, said that political sentiment has not yet been reflected in the financial sector.

In its recent report, the Fund noted that defense companies continue to face “significant barrier” in finding financing.

Asset managers and banks alike point to regulatory restrictions that have led to arms manufacturers being classified as “sin stocks.”

Jan-Hendrik Boelens, founder of Alpine Eagle, said that European banks have required him to fill out questionnaires confirming that his activities comply with environmental, social and governance standards.

Balazs Nagy, co-founder and CEO of Tytan Technologies, added that it took their company 12 months just to open a bank account.

On March 4,2025, Militarnyi reported that the President of the European Commission, Ursula von der Leyen, presented a plan to rearm and strengthen Europe’s military capabilities and support Ukraine.