The effects of COVID-19 are far-reaching and pose major challenges not only for the real economy but also for the financial sector. The profitability of the business model of many financial institutions was already strained before the pandemic; the Corona crisis further exacerbates this situation. As a result, banks will have to shift their focus, especially in portfolio management, towards analysis and monitoring.
This expert document outlines the factors that will affect banks' credit margins in the post-Corona period and the strategic measures that banks can now take to best counter the anticipated negative developments.
In this context, there are three main fields of interest:
- Effects of the Corona pandemic on the earnings contribution from lending business
- Growing demand for transparency and control by supervisors and other stakeholders
- Higher resource commitment due to increased need for analysis in the front and back office