Doubts grow over banks’ optimistic forecasts for credit losses

At the start of February, Europe’s largest banks began to report their full-year 2020 results. With the half-way point of the first quarter of 2021 already looming, investors wanted to hear more about the outlook, particularly for credit costs.

Here is the good news: the executive summary from bank CEOs is that the worst is past. And the tantalizing possibility is that write-backs from conservative provisions taken in the first half of 2020 could nudge up reported profits in 2021.