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 world 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 can be seen in Germany. The country’s GDP has been revised downward for 2020 due to the economic disruption caused by Coronavirus. Germany is among the worst affected countries in the world, with total confirmed cases of 195,418 as of July 1. However, with new cases falling, the government is slowly lifting lockdown restrictions. This move is expected to help revive the economy, benefiting the country’s banking industry.

This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in Germany. 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

- As the economic recession incited by the COVID-19 outbreak has impacted the economy, German banks could see a near-term downside to profitability. Net interest margins remained low and could be compressed further by rate changes. Fee income will fall, driven by decreased retail spending, while non-performing loan ratios will increase - particularly across SMEs.
- The German government has announced various tax measures, such as the deferral of tax payments and a reduction in prepayments. It has also suspended insolvency filing obligations until the end of September 2020 to protect companies, as well as postponing consumer loan repayments for three months.
- These measures will support the banking sector in the short term, but there will be pressure on lenders for many months following.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the German retail lending and deposit industry.
- Understand the key market trends, challenges, and opportunities in the German retail lending and deposit industry.
- Receive a comprehensive insight into the total consumer loans in Germany, including mortgages, personal and credit card loans as well as retail deposits balances.