European banks can manage the economic fallout of the Russia-Ukraine conflict. Thus the analysts of S&P whose base scenario foresees business interruptions in some business sectors and a reduced but still positive economic growth in 2022.
“This is undoubtedly a more difficult and uncertain macroeconomic environment than we predicted in early 2022, and as a result we expect European banks to see lower growth in loans and assets, as well as limited cost increases” , he said S&P Global Ratings analyst Nicolas Charnay in a report dedicated to the ongoing conflict.
As a result, S&P expects European banks to see more subdued credit and asset growth, as well as limited cost increases, but the investment bank expert does not believe these effects will significantly impact the view of merit. credit rating of most European banks. Charnay added in fact: “But we do not see these effects as likely to significantly test our view of the creditworthiness of most European banks.”
The conflict has reshuffled and worsened our downside scenarios. European banks are not all equally vulnerable to these downward scenarios, so if these scenarios become more probable, S&P therefore envisages differentiated rating actions, both between the banking sectors of individual countries, and between different national banking institutions and on individual banks. . Should downside risks materialize, S&P also expects European governments and central banks to step in to dampen the effect on the real economy and, indirectly, on banks.