Reasons to be fearful: bank second-quarter results
Banks promised greater clarity on expected loan losses with their Q2 results, which are now looming – but they are unlikely to provide it.
With the second quarter of 2020 drawing to a close and all the new alternative data footfall trackers showing economic activity picking up in the US and Europe, investors are starting to look forward to the undoubted highlight of their summer.
No, not Wimbledon. That’s still cancelled. So, too, is Glastonbury.
All the excitement this year will be for banks’ second-quarter results.
They told us back in April, when banks ramped up reserves against looming loan losses in the grip of lockdown, that by the time they reported again in July they would have a much better handle on the impact of the pandemic on economies and on borrowers.
With the anticipation already building even before the three months was up, some helpful bank chief executives and chief financial officers were persuaded to share thoughts with investors and bank analysts, almost as if they were offering to guide a nervous and volatile stock market.
What are we learning?
From June 10-12, Goldman Sachs hosted its 24th annual European financials conference in the now familiar virtual format. Its bank analysts presented a disappointing summary for any investors expecting illumination in the next round of results calls.