FT News Briefing European bank earnings, coronavirus threat to call centres
Apr 28, 2020
US oil prices took a hit as major funds adjusted their contracts. Meanwhile, European banks are bracing for hefty loan-loss provisions as quarterly earnings loom. The impact of the pandemic is deeply felt in the Philippines, particularly in the outsourcing sector, where strict lockdowns are jeopardizing call center operations. Additionally, companies are turning to AI advancements and operational shifts to adapt to the evolving crisis, emphasizing the urgent need for strategic adaptations amid ongoing economic uncertainties.
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Speculative Trading's Impact
- The U.S. Oil Fund, the world's largest oil-backed ETF, sold off its short-term contracts.
- This move, driven by fears of negative oil prices, highlights how speculative trading can impact the fragile oil market.
Loan Loss Provisions and New Rules
- New accounting rules require banks to provision for potential loan losses based on economic models.
- This makes it hard to assess the true size of provisions, especially during uncertain times like the coronavirus pandemic.
HSBC and Barclays in Focus
- HSBC, generating 80% of its profits in Asia, offers a unique perspective on the crisis's impact.
- Barclays, with its Wall Street presence, faces a dilemma: increase provisions and risk lending capacity, or heed the Bank of England's call for less caution.