Retail Banking in Italy: Coronavirus (COVID-19) Sector Impact

Retail Banking in Italy: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have significantly impacted the global economy, with key stock markets across the world losing 20-50% of their value year-to-date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend is expected in Italy as well, as economic growth in the country is expected to register a dip in the first quarter of 2020 and will decline further if this disease relapses. The real GDP growth rate for Italy is expected to decelerate in 2020. The decline will have an adverse impact on all sectors including the banking industry.

This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in the Italy. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- Italian banks will face pressure to their earnings and asset quality as a result of the socioeconomic shock to Italy and the resulting effects on their operating environment from the spread of coronavirus. Given the expected scale and length of the disruption to Italy’s economy, it’s no surprise that key banking indicators will suffer.
- The Bank of Italy’s measures to ease the impact of COVID-19 will provide temporary relief to the people thrown out of employment. For instance, to protect consumers’ interests, the Italian government has temporarily suspended all mortgage payments and other debt payments. This will work in the short term and hold down the impaired loan ratio for the first half of 2020, but pressure will be on lenders for many months following.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Italian retail lending and deposit industry.
- Understand the key market trends, challenges, and opportunities in the Italian retail lending and deposit industry.
- Receive a comprehensive insight into the total consumer loans in Italy, including mortgages, personal and credit card loans as well as retail deposits balances.