Daily update: May 3, 2021

Subscribe on LinkedIn to stay up to date with every new daily update – a curated selection of essential information on financial markets and the global economy from S&P Global.

The COVID-19 pandemic has accelerated the technological disruption of global banks, creating new customer expectations, new forms of competition and new opportunities.

Despite the record levels of deposits seen during the pandemic, virtual and traditional banks have struggled under the conditions created by the coronavirus crisis. New virtual banks faced vulnerabilities due to extremely low interest rates, while traditional banks recorded billions in loan loss provisions and saw asset quality deteriorate. While digital banking has consolidated as a pillar for populations in urgent need of access to credit, alongside existing banks that have expanded their digital services and offers, S&P Global Ratings believes that the health crisis has revived competition from the digitization of global banks as the crisis continues.

In Asian economies, virtual banks and financial technologies are becoming the norm. But in some industries, incumbent operators have the advantage. In India, leading private sector banks and the State Bank of India are at the forefront of technology adoption and laying the groundwork for a fintech to enter the country’s under-penetrated system. However, market watchers predict that they will need to do more to prepare their IT systems for the surge in consumers switching to digital channels. Meanwhile, in Malaysia, S&P Global Ratings expects digital-only banks to remain niche players over the next 3-5 years due to initial operational constraints, while the country’s industry leaders have an established digital infrastructure, diversified earnings profiles and large customer bases to seize these diversification opportunities earlier.

In the United States, increasing investment in digital capabilities will be key to the long-term competitive success of retail banks.

“The COVID-19 pandemic has catapulted banks’ digital retail offerings into another league as social distancing restrictions increase customer preference for digital products,” S&P Global Ratings said in a report on technology disruption in retail banking in the United States. “The pandemic has allowed banks to showcase their product line online, validating the investment that the biggest banks have made in technology in recent years, and hastened the closure of physical branches. Many smaller regional banks are also responding to the obvious need for scale through mergers, in part because of the demand for additional investment in technology. “

This is also evident in the UK, where banks are stepping up plans to close local branches in favor of expanding digital offerings. The more than 410 branch closures planned by UK banks for this year already exceed the 368 seen over the past year, according to a report by consumer group Which. The UK now has fewer branches than most major European countries, with around 113 per million inhabitants, compared to nearly 514 per million in Spain and 550 in France, according to data from S&P Global Market Intelligence.

“An increasing number of customers are choosing to use new technology to pay and manage their money when and where it is convenient for them, especially during the pandemic,” a UK Finance spokesperson told S&P. organization that represents the country’s banks. Global market intelligence. “But technology is not for everyone and banks are committed to ensuring that customers can continue to access the important services they need, including access to cash. Branches play a key role in the life of local communities, which means decisions to close them are never taken lightly. “

Increasing investments in sustainable finance, a wave of mergers and acquisitions and decentralized currency inflows are further shaping this new landscape.

Today it’s Monday 3 May 2021, and here is the essential intelligence of today.

The credit cycle

The Fed’s policy review during the current recovery

The current stance of the Fed’s monetary policy is sufficiently accommodative, as evidenced by the deviations of the fictitious federal funds rate from a policy rule estimated over a period of relative macroeconomic stability. This contrasts with the immediate consequences of the Great Recession, when policy was not accommodating enough.

: Read the full report from S&P Global Ratings

The banking sector under pressure

BBVA CEO Develops M&A Outlook and Engages in Turkey Amid Turbulence

Spain’s Banco Bilbao Vizcaya Argentaria SA does not feel pressured to pursue merger and acquisition opportunities despite the consolidation underway in the Spanish market and the bank sitting on excess capital following the sale of its US operations, according to the CEO Onur Genç.

Read the full article from S&P Global Market Intelligence

ESG during the COVID-19 era

First 100 days: US agencies ‘move at remarkable speed’ on energy and climate

One hundred days after taking office, US President Joe Biden has made rapid progress in dismantling his predecessor’s energy and climate program and implementing his own, according to policy experts.
—Read the full article from S&P Global Market Intelligence

With ‘Skin In the Game’, Scatec CEO leads the global solar start-up push

Raymond Carlsen was on a plane from Oslo, Norway, to London in late 2018 when he received a call from an executive at Equinor ASA, informing him that the Norwegian oil company had become a major shareholder in Scatec ASA, the small solar developer that Carlsen had led for nearly a decade. The news, made slightly embarrassing by the fact that he was on his way to meet a competitor partly owned by BP PLC, another oil major, caught Carlsen off guard.

—Read the full article from S&P Global Market Intelligence

The future of energy and raw materials

Ark., Oklahoma, utility sale is victory for Centerpoint, gas companies – Analysts

CenterPoint Energy Inc.’s $ 2.15 billion deal to sell its Arkansas and Oklahoma gas service territories to Summit Utilities Inc. is a victory for both the utility industry Houston-based multiples and for the local distribution company industry as a whole, analysts said.

—Read the full article from S&P Global Market Intelligence

Urals NWE crude overtakes Mediterranean market for first time since July

The North West Urals’ crude market has passed the Mediterranean for the first time since July, according to data from Platts, as a tighter export schedule out of the Baltic Sea and the Improved refining margins have stimulated the interest of buyers.

—Read the full article from S&P Global Platts

Petrochina’s new pipeline sales pave the way for trading on Chinese stock exchanges

State-owned oil and gas company PetroChina has sold natural gas by pipeline on two Chinese commodity exchanges with new specifications that include clearances for the resale of gas volumes, the use of warehouse receipts and lockouts. volume for winter supply – characteristics that are essential for the development of a financial market based on physical transactions.

—Read the full article from S&P Global Platts

US Finished Steel Prices Rise To Continue: Platts Survey

U.S. steel market sentiment for finished steel prices is the strongest since January, with participants continuing to expect firmer finished steel prices as May approaches, according to the monthly market survey conducted by S&P Global Platts.

—Read the full article from S&P Global Platts

The European Parliament launches a new call for the shutdown of the Nord Stream 2 gas link

The European Parliament has again called for the shutdown of the Nord Stream 2 gas pipeline project, at least the third since August after the poisoning of Russian opposition politician Alexei Navalny.

—Read the full article from S&P Global Platts

India at a glance: Oil demand issues and COVID-19 storm resistance

India’s astronomical surge in COVID-19 cases to record levels has baffled policymakers and overwhelmed the country’s medical infrastructure. The current spread of infection has raised fears that a crisis of unprecedented magnitude is weighing on demand for oil.

—Read the full article from S&P Global Platts

Written and compiled by Molly Mintz.

Source link

About Joetta Becker

Check Also

Toyota tests hydrogen combustion engines in race cars

TOKYO – Toyota said Monday it is testing hydrogen combustion engines in racing cars as …