Banks are coping with soaring inflation and rising interest rates, a pincer movement that squeezes borrowers, plus the Ukraine conflict
Frankfurt — Europe’s banks, facing a potential economic storm and a rise in borrowing costs for the first time in more than a decade, are set to show their weak spots when they update investors on how their business has fared this year.
The difficult economic conditions have put investors in a cautious mood, which means European banks, like their US rivals, will earn less money on deal making and selling investment products. Analysts are also watching developments at Uniper, the German power company that received a state bailout on Friday.
And Germany’s co-operative banks said they expect a “considerable decline” in profit this year as they brace for credit losses. “I don’t know what the real impact ... is going to be and ... that worries me,” said the official. Santander and BBVA report second-quarter results at the end of the month.
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