A new report by Bain & Company shows that the number of European banks in grave danger rose sharply last year and is now close to its 2013 level, despite extensive efforts by lenders to bolster balance sheets and profits.

"The fragile banks that have not acted effectively or that delayed taking action find themselves in a very difficult position," said João Soares, a partner with Bain and author of the report. He said he believed that the number of banks in jeopardy had increased partly because the lenders that originally showed only problems in profitability developed issues with their balance sheets as losses mounted.

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