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Homework answers / question archive / COVID-19: Impact on the banking sector” COVID-19 has generated significant instability and high volatility in global capital markets
COVID-19: Impact on the banking sector” COVID-19 has generated significant instability and high volatility in global capital markets. While the full impact is yet to be determined, it’s expected that the adverse impacts are likely to continue from the virus’ knock-on effects… Among others, this KPMG report identifies Profitability and credit management/cost of risk as one of the areas that is likely to be most impacted by COVID-19.
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Critically analyse why Profitability and credit management/cost of risk, i.e. credit risk are main concerns for banks given the COVID-19 environment, as such would have a severe impact on the banking sector globally.
The COVID-19 pandemic could be the most serious challenge to financial institutions in nearly a century. As the economic fallout spreads, retail banks find themselves juggling some big priorities that require concrete steps to reposition now while also recalibrating for the future. They’re working to keep their distribution channels open, despite social distancing advice and supervisory and compliance functions that were never designed for remote work. They’re trying to manage revenue and customer expectations, despite near-zero interest rates and growing pressure on consumers. And, they need to keep an eye on strategy and brand issues that will define their future, as market forces and customer behaviors potentially change coming out of this crisis.
