Eurozone Commercial Banking Report - Business Monitor International - Industry Reports

Eurozone Commercial Banking Report

Eurozone Commercial Banking Report - Business Monitor International - Industry Reports
Eurozone Commercial Banking Report
Published Aug 06, 2016
62 pages — Published Aug 06, 2016
Price US$ 1,295.00  |  Buy this Report Now

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Abstract:

With several headwinds facing the eurozone banking sector, aggregate loan growth is set to slow sharply going into ----. We identify five key themes for eurozone banks over the next two years: Profitability will remain weak amid unprecedented monetary easing Unresolved balance sheet issues will present systemic risks Slower economic growth will impair lending Borrower sentiment will deteriorate following the UK s Brexit vote Banking sector consolidation will pick up pace Despite an otherwise convincing recovery in asset and lending growth over the past two years, warning signs are appearing once again for the eurozone banking sector. ...With several headwinds facing the eurozone banking sector, aggregate loan growth is set to slow sharply going into ----. We identify five key themes for eurozone banks over the next two years: Profitability will remain weak amid unprecedented monetary easing Unresolved balance sheet issues will present systemic risks Slower economic growth will impair lending Borrower sentiment will deteriorate following the UK s Brexit vote Banking sector consolidation will pick up pace Despite an otherwise convincing recovery in asset and lending growth over the past two years, warning signs are appearing once again for the eurozone banking sector. The most explicit warning sign is that bank equity prices have fallen sharply - broad bank stock indices have nearly halved in value from a year ago - reflecting an increasingly difficult profit environment, as well as unresolved balance sheet problems. While the good news is that lending volumes have been picking up, the bad news is that profitability is being impaired by negative short-term policy rates and flat-to-inverted yield curves, not to mention the lacklustre economic growth outlook. Systemic risks have risen following the UK s vote in June to leave the European Union, with eurosceptic-related political risk putting the woes of major banking sectors such as Italy s into focus.

...With several headwinds facing the eurozone banking sector, we have lowered our aggregate loan growth forecast for ---- and ---- to -.- from -.- and -.- from -.- in those years, respectively. While still growing, such slow expansion means that the eurozone banking sector would indeed have a lost decade , with loans not returning to ---- levels in nominal terms until ----. Furthermore, much of that growth will occur outside of the big four eurozone economies (Germany, France, Italy, and Spain), pointing to continued malaise at the core of the eurozone. Here, we look at the five biggest issues facing the eurozone banking sector in the next two years, and beyond: Weak profitability amid unprecedented monetary easing: The European Central Bank (ECB) s adoption of negative deposit rates will continue acting as an effective tax on the banking sector on aggregate by narrowing interest rate margins, and monetary policy will only become looser rather than tighter. The ability to generate profits in this environment is not equal across various eurozone banking sectors, due to differing funding and lending structures. ...The ability to generate profits in this environment is not equal across various eurozone banking sectors, due to differing funding and lending structures. For instance, French net interest income actually rose from a low

...All information contained in this publication is copyrighted in the name of Business Monitor International Ltd, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher. ...

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Source:
Document ID
2047-9344
Industry
Format:
PDF Adobe Acrobat
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Business Monitor International - Industry Reports—Established in 1984, Business Monitor International is a leading online publisher of specialist business information on global emerging markets. Business Monitor's range of quarterly services covers political risk, finance, macroeconomic performance, outlook and forecast, industry sectors and the business operating environment. Each Industry Report has been researched at source, and features latest-available data covering production, sales, imports and exports; 5-year industry forecasts through end-2012; company rankings and competitive landscapes for multinational and local manufacturers and suppliers; and analysis of latest industry developments, trends and regulatory changes.

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MLA:
Business Monitor International - Industry Reports. "Eurozone Commercial Banking Report" Aug 06, 2016. Alacra Store. Dec 07, 2016. <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Eurozone-Commercial-Banking-Report-2026-1384>
  
APA:
Business Monitor International - Industry Reports. (2016). Eurozone Commercial Banking Report Aug 06, 2016. New York, NY: Alacra Store. Retrieved Dec 07, 2016 from <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Eurozone-Commercial-Banking-Report-2026-1384>
  
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