Investors find reasons to be cheerful about bank credit
A sombre set of second quarter earnings has done little to frighten credit investors away from European banks this month. Fund managers believe the sector is well capitalised enough to withstand any reasonable shock from Covid-19, putting subordinated bonds in an ideal position to rally into the end of the year, writes Tyler Davies.
Nearly all of Europe’s largest lenders have now reported their results for the second quarter of 2020.
The obvious theme has been the huge increase in impairment charges, with banks stacking up reserves against the risk of loan losses during the coronavirus pandemic.This has had ...