Report by McKinsey & Company
Banks Steel Themselves for Loan Losses Ahead
The McKinsey Global Banking Annual Review offers research and insights into the global banking industry. Their most recent report published on December 9th, 2020 is particularly noteworthy. It points out considerable risks and debt exposures that banks are struggling to manage.
In anticipation of a sharp increase in personal and corporate defaults due to the COVID-19 crisis, global banks have provisioned $1.15 trillion for loan losses through the third quarter of 2020 - more than they did in all of 2019. The report projects that loan-loss provisions in the coming years will exceed those of the global financial crisis.