Bank Shares Fall as Coronavirus Impact Spreads

Bank Shares Fall as Coronavirus Impact Spreads

Bank stocks plummeted internationally on Thursday, as the release of companies’ Q2 earnings have demonstrated the influence that the COVID-19 pandemic still holds over world economies.
Among those banks adversely affected in the second quarter were Lloyds Bank, which reported loss provisions at a rate higher than was forecasted, and BBVA and Standard Chartered, which both saw profits slide.
Combined with a historic contraction in the US economy, these bleak reports triggered a sell-off across the banking sector. The Euro Stoxx Bank index, which tracks the biggest banks in Europe, fell by more than 3%, and the MSCI European Banks index (which includes both British and European banks) fell by 2.6%.
Major stock markets were also dragged lower on Thursday; the FTSE 100 fell by 2% before noon, and the DAX and Spanish IBEX 35 fell by 3% and 2.7% respectively.
In all, the sell-off pointed to increasingly pessimistic investor attitudes in the wake of the COVID-19 pandemic. “We have seen the UK economy deteriorate since the first quarter,” remarked Lloyds CEO António Horta-Osório as the bank’s half-year profits were completely submerged by its setting aside of £2.4 billion as a loss buffer – £1 billion greater than analysts estimated. Shares in Lloyds subsequently fell by 9%, an 8-year low.
Barclays also fell below analysts’ expectations in its Q2 results, and Santander announced a quarterly loss of €11.1 billion, the largest such loss in its 163 years of operation.


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Bank Shares Fall as Coronavirus Impact Spreads
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