Table of Contents

COVID-19 Update

Impact Assessment

Retail Deposits

Total Consumer Loans

Mortgage Loans

Credit Card Loans

Other Consumer Loans

Appendix

Supplementary Data

Definitions

Methodology

About GlobalData

Contacts

Retail Banking in The US: 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 significantly impacted the global economy, with key stock markets across the world losing 20-50% of their value for the year-to-date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend is expected in the US, as economic growth is set to have dipped in the first quarter of 2020 and will decelerate further if the disease continues to spread over the coming months. The decline will have an adverse impact on all sectors, including banking.

This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in the US. 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

- As the economic recession incited by the COVID-19 outbreak starts to bite, US banks could see a near-term downside to profitability. Net interest margins will remain low and could be compressed further by rate changes. Fee income will fall, driven by decreased retail spending, while non-performing loan ratios will increase
- particularly for SMEs. To address this issue and protect both consumers’ and lenders’ interests, on March 13 the US government decided to waive all federal student loan interest until further notice. - Moreover, credit provisioning that is driven by economic expectations under the current expected credit losses standard could rise, leading to further pressure on bank profits.
- Government support, particularly cheap funding, will help but ultimately can only mitigate the impact. For banks, the severity of losses will depend on whether government programs are able to save businesses threatened with bankruptcy and help people re-enter the workforce.

Reasons to Buy

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