The Covid-19 pandemic and oil price shock this year have had a major impact on global banks, according to S&P Global Ratings.
In its report entitled "Global Banking: Recovery Will Stretch To 2023 And Beyond" released today, S&P does not expect the world's largest banking sector, including more than half of the G20 countries to recover to pre-COVID-19 to 2023.
S&P Global Ratings credit analyst Gavin Gunning said the impact on global financial institutions was negative.
Gunning added that his party has revised negative economic or industrial trends that support the financial strength of most banking jurisdictions around the world.
He says that this trend should continue.
“Furthermore, we have seen the negative rating momentum affecting financial institutions in most major banking jurisdictions, indicating the risk of depreciation.
"Even for less affected banking jurisdictions, recovery to pre-COVID-19 levels is unlikely to occur before the end of 2022. These jurisdictions include China, Canada, Singapore, Hong Kong, South Korea, and Saudi Arabia. The risk of depreciation remains for this banking jurisdiction, in our view, ”explained Gunning.
According to Gunning, the negative rating measures from March 1 to September 7, included 234 rating measures in banks and 101 rating measures against non-bank financial institutions (NBFI).
According to him, to estimate the form of recovery for banks, his party has analyzed the 20 largest banking systems in the world in its report.
Gunning also noted that losses due to loan-related outbreaks are likely to increase dramatically for the US and Canadian banking systems this year as well as next year.
"A complete economic recovery may take a few more years," Gunning said.
