Soon we’ll know what 'relationship banks' are really worth
Since the financial crash, the crucial part of relationship banking has been pretty straightforward: offer borrowers cheap cash and become a core lender, then pitch for ancillary business. But the disastrous effects of Covid-19 on corporate finance mean that cozy relationships will be tested, with companies under pressure and in serious need of extra cash. We’ll soon know which relationships were real and which were not.
As companies across the world struggle to make sense of the pandemic and its impact on their businesses, a number of high profile borrowers such as AB InBev and Kraft Heinz have drawn their revolving credit facilities.Many see these borrowers as the vanguard rather than the outliers. ...
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