Corona puts German banks in trouble
BCG study warns of rising NPL figures
Is Germany sliding into a new banking crisis as a result of COVID-19? At least that is what the Boston Consulting Group (BCG), a management and strategy consultancy, claims in a recent study. The reason for this is the increasing number of loan defauls that are expected in the coming months and years due to the corona crisis. In the long term, NPLs could put such a heavy strain on bank balance sheets that financial institutions could find themselves in difficulties.
According to the experts at BCG, the domestic banks are currently still making a solid impression. The earnings of the credit institutions are stable due to the high demand for credit. The situation becomes problematic if German companies do not recover quickly enough and borrowers can no longer meet the payment of their loans.
The Leibniz Institute for Economic Research in Halle and the European Banking Authority (EBA) have already issued an alarm and warned of a rising number of defaulted loans. The banks themselves are currently still confident. They have prepared themselves accordingly, commented Sparkassen president Helmut Schleweis in a recent interview with Handelsblatt. But: “It will be exhausting.” Handelsblatt
(Δικαιώματα εικόνων: istockphoto.com/MarkusBeck)