Retail Banking in Ireland - Coronavirus (COVID-19) Sector Impact

Retail Banking in Ireland - Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most countries across the world registering declines in their economic growth for the year to date. Many economists and institutions have cut their forecasts, as a number of countries officially slipped into recession in Q1 2020.

The Irish government’s measures to contain the virus have significantly impacted the country’s economy, with Ireland now facing a worse recession than in the aftermath of the global financial crisis. However, with the phased reopening now in progress, consumer spending is expected to rebound in the second half of the year, and the gradual revival of the economy will eventually benefit the banking industry.

This report focuses on the impact of the coronavirus outbreak on the economy and the retail banking industry in Ireland. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat coronavirus.

Scope

• Coronavirus will not have a significant long-term effect on the Irish banking sector. Loss of income and increased unemployment due to the lockdown will have short-term implications affecting the mortgage and consumer lending segments, which will ultimately recover over the forecast period.
• Even with the COVID-19 Pandemic Unemployment Payment scheme in place, there will be a deterioration in household finances resulting in a reduced ability to save. This will be mitigated somewhat by a drop-off in consumption, both during the crisis as lockdown prevents spending but also into the months of recession, when poor consumer confidence will see weaker-than-normal spending.
• The tension between these two factors will determine whether there are positive net inflows into the retail savings market or net outflows, as savings could be used to cover household costs.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the Irish retail lending and deposit industry.
• Understand the key market trends, challenges, and opportunities in the Irish retail lending and deposit industry.
• Receive a comprehensive insight into the total consumer loans in Ireland, including mortgages, personal and credit card loans as well as retail deposits balances.