PARIS - 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.

Thery said there was a clear risk of a recession in the bloc for which he expected 0% growth in the next six to nine months and 6% to 8% inflation in the next 12 months.

His comments come as German inflation rose to its highest level in almost 50 years in August at 8.8%.

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 due mainly to the fact that French mortgage rates were fixed and among the lowest in the euro zone.

Lower economic activity in France, of course, will bite and it is only logical to assume the 2023 financial results of French banks will not be as good as in 2022, he added.

During the summer, BNP Paribas, Societe Generale and Credit Agricole reported better-than expected second-quarter results amid buoyant activity across investment and retail banking.

Commenting on the hawkish speech of U.S. Federal Reserve Chair Jerome Powell at Jackson Hole last Friday, Thery said it was a reminder of the key mission of a central bank.

"There is no doubt that the first job of a central bank is price stability and for me, it's just a reminder of that mandate and it (the speech) has to be understood as such," he said.

He said the fact euro zone inflation was mainly driven by energy costs while second-round inflation was at the core of rising prices in the U.S. could explain the policy gap between a fast-tightening Fed and the European Central Bank.

The ECB raised rates by 50 basis points to zero in July and while a similar move was expected in September until recently, a host of policymakers have made the case for a larger hike due to the worsening inflation outlook.

(Reporting by Julien Ponthus, editing by Ed Osmond)