European banks weather ‘most challenging six months in history’ – Wall Street Journal

Standard Bank reported its profits are likely to plunge by as much as 50% this year as shareholders in South African banks brace for the worst reports since WWII. This reflects the global picture for the banking sector. Second-quarter results from some of the biggest European banks reveal – unsurprisingly – that it's been a very bad year. Germany's Deutsche Bank, the UK's Barclays and Spain's Banco Santander have all reported an increase in loan-loss charges in the second quarter. Deutsche Bank is covering for potential losses on loans to borrowers hurt by the coronavirus pandemic, while Barclays' net profit dropped 91%. Santander reported a €12.6 billion charge from a lower valuation of some previous acquisitions. And while all the banks are saying optimistic things about the second half of 2020, the real effect of the coronavirus epidemic is certainly not yet clear. The Wall Street Journal points out that the Covid-19 pandemic came as many banks in Europe were already having a hard time making money in an extremely low — or even negative — rates environment and an overcrowded banking sector. Tough times ahead, it seems. — Renee Moodie

Europe's banks reveal fuller picture of Coronavirus impact

By Patricia Kowsmann and Simon Clark

Some of Europe's biggest lenders reported a big jump in coronavirus-related losses and provisions for bad loans as the pandemic's impact on their businesses becomes clearer.

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