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Retail banking in France: Coronavirus (COVID-19) Sector Impact

May 2020 | 17 pages | ID: REA32464AF66EN
GlobalData

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Retail banking in France: Coronavirus (COVID-19) Sector Impact

SUMMARY

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.
Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.
A similar trend is expected in France, as economic growth in the country is expected to have dipped in the first quarter of 2020 and will decelerate further if the disease is not controlled at the earliest possible opportunity. The decline will have an adverse impact on all sectors, including the banking industry.
This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in France. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat Coronavirus.

SCOPE
  • Given the expected scale and length of the disruption to the French economy, it is no surprise that key banking indicators will suffer. Banks will take a hit from a rise in bad loans as consumers and small businesses are particularly vulnerable. Banks could also see a rise in their delinquency rates, resulting in higher non-performing assets.
  • Banking profits are under pressure and balance sheets will take a direct hit resulting from Coronavirus. Net interest margins will remain low and short-term costs will rise.
  • Fee income will also fall, driven by decreased retail spending, and even though Banque de France and the European Banking Commission are prepared with liquidity injections into the banking system, it is unclear as to whether this strategy will be effective.
REASONS TO BUY
  • Make strategic decisions using top-level revised forecast data on the French retail lending and deposit industry.
  • Understand the key market trends, challenges, and opportunities in the French retail lending and deposit industry.
  • Receive a comprehensive insight into the total consumer loans in France, including mortgages, personal and credit card loans as well as retail deposits balances.
COVID-19 Update
Impact Assessment
Retail Deposits
Total Consumer Loans
Mortgage Loans
Credit Card Loans
Other Consumer Loans
Appendix
Supplementary Data
Definitions
Methodology
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