Outlook stable for global investment banks, negative for most global finance companies

Donald Robertson and Ana Arsov of the Banking team explain how the lessons global investment banks learned from the financial crisis better prepared them to withstand coronavirus stresses, and how strong capital markets revenue buffered the large loan-loss provisions they booked during 2020. Plus, Mark Wasden and Bruno Baretta of the Banking team explore how coronavirus effects are driving the negative outlook for most global finance companies.

Inside this episode:

• Mark Wasden and Bruno Baretta of the Banking team explore how coronavirus effects are driving the negative outlook for most global finance companies (begins at 2:13).
• Donald Robertson and Ana Arsov of the Banking team explain how the lessons global investment banks learned from the financial crisis better prepared them to withstand coronavirus stresses, and how strong capital markets revenue buffered the large loan-loss provisions they booked during 2020 (begins at 9:19).

Related content:

• Finance Companies - Global: 2021 outlook is negative (Slides) - Our outlook for finance companies globally is negative to reflect ongoing effects of the coronavirus pandemic, though several subsectors have been more resilient through adverse conditions.
• Asset Management Companies (AMCs) – China: AMCs' participation in bank restructuring reinforces their policy role but weakens standalone credit profile - Aside from acquiring and disposing bad loans, AMCs are performing a growing range of functions to facilitate the restructuring of distressed banks.
• Global Investment Banks: 2021 outlook stable as diverse businesses, strong capital, liquidity and funding ease pandemic-related asset quality pressure (Slides) - Diverse, profitable businesses along with strengthened capital and liquidity will shield the global investment banks against pandemic-related asset quality deterioration in 2021.