Financial performance of European banks 2021 study
How is the pandemic affecting the financial performance of European banks?
The Covid-19 crisis continues to undermine global financial stability. While its full impact on the banking sector is yet to be determined, the 2020 annual results let us build a picture of the Covid-19 impact on the expected credit losses (ECL) in banks’ financial disclosures.
We have analysed the annual reports of 26 banks in 11 European countries to better understand the impact of Covid-19 on their financial performance. This study is the second edition and follows on our first edition of the report released in September 2020. The study is based on audited information disclosed in the annual reports of participating banks published until 1 April 2021.
A focus on Expected Credit Losses
The study mainly focuses on the ECL-related impacts of Covid-19 on the European banking industry. It covers:
The extent to which the Covid-19 pandemic has impacted the operating profit or loss, and the 2020 ECL charge.
The consequences on the ECL coverage ratios and the ventilation of gross credit exposure and ECL allowance by stage.
What European banks disclosed on their post-model adjustments and macro-economic assumptions.
Up against great economic and societal upheaval as a result of Covid-19, banks around the world continue to take sustainability seriously and firmly acknowledge the related risks and opportunities, for the market and wider stakeholders alike. For the second year running, Mazars publishes its responsible banking practices report to assess how banks embed sustainability into their commercial practices.