How banks got away with the pandemic
The worst pandemic in a century, an event which has changed our whole way of life, appears to have dealt only a glancing blow to global banking. Good risk management certainly played a role; but, crucially, government support bailed out customers before they impacted bank balance sheets. Is there bad news to come when those policies go back to normal?
“I think we’re going to study this for years and years.”
James von Moltke, Deutsche Bank’s CFO, is responding to a question from Euromoney that we put to executives all over the world during their first half results. Why, we asked, has the banking sector come through so comparatively unscathed from a pandemic that has not only changed the world’s way of doing business but its way of life?
“For the nature of what we’ve lived through,” von Moltke agrees, “the credit cycle has been remarkably mild.”
There does appear to be a striking disconnect between the global impact of Covid-19 and the condition of the banking sector.