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Jan Schildbach

Analyst, Team Head
Banking, Financial Markets, Regulation

Topics:
Banking, Financial Markets and Regulation

Address:
Mainzer Landstraße 11-17
60329 Frankfurt
Germany

Contact:
Deutsche Bank Research

More documents written by Jan Schildbach

101 Documents
January 4, 2024
Region:
1
The last 12 months have seen an impressive rebound of European banks which may have resulted in the industry’s most profitable year on record. Surging interest rates have played a major role, but resilient asset quality and a lower-than-feared impact of inflation on operating expenses have helped as well. A recovery in capital ratios – despite what probably have been the largest capital returns to shareholders since the financial crisis – rounds out a highly successful year. To pour a bit of water into the wine: business volumes were rather weak, in lending as well as in capital markets. Yet this is the flipside of the jump in rates and follows significant momentum over the previous years. Remarkably, the turmoil in the US and Swiss banking sectors in March has left no lasting scars. [more]
September 28, 2023
Region:
2
The banking sector in Europe is benefiting from a set of conditions which have allowed for the strongest bottom-line result on record, even surpassing the pre-financial crisis peak of 2007. Rising interest rates have led to a surge in net interest income, asset quality remains sound and provisions therefore contained, and banks maintain tight cost discipline. Capital and liquidity levels continue to be robust, considerable returns to shareholders notwithstanding. European banks have also caught up with their US peers with regard to profitability ratios, for the first time in many years. Further gains in this benign environment may be harder to achieve though. [more]
June 9, 2023
Region:
3
European banks are running at full steam, achieving the best start to a year since the financial crisis – the stress in March notwithstanding. Revenues have been buoyed by exceptional growth in interest income, while provisions for loan losses have fallen back again and costs remain in check. Capital and liquidity positions continue to be very robust, in spite of ample returns to shareholders and TLTRO repayments to the ECB. There are some clouds on the horizon though: interest rate increases are likely coming to an end and loan growth may slow further. [more]
June 7, 2023
Region:
4
Corporate lending is slowing substantially but this is primarily a normalization and due to subdued demand at least as much as it is due to supply conditions, i.e. banks’ tighter credit standards. At +8% yoy, credit expansion is still substantial. Only two industries are currently seeing a contraction. More worrying is the drying up of the corporate bond market where net issuance has collapsed since autumn. It is suffering from the double whammy of much higher interest rates and the disappearance of its dominant buyer of recent years, the ECB. [more]
May 26, 2023
Region:
5
With Q1 GDP growth revised to -0.3% we now expect annual GDP to shrink by 0.3% in 2023. With the expected US recession weighing on German economic momentum towards year end we have cut our annual forecast for GDP growth in 2024 to 0.5% from 1.0%. Meanwhile, the energy transition policy is putting strains on government cohesion, as can be seen from the failure to agree on a piece of climate legislation this week. Spending pressures and debt-brake limits add to tensions. Still, none of the three ruling parties has an incentive to trigger early elections. [more]
April 6, 2023
Region:
7
Recent wobbles in US and European banking markets have been triggered by idiosyncratic issues at some institutions and broader uncertainty about the impact of central banks’ monetary tightening. However, capital and liquidity levels of the banking industry in Europe continue to be very robust. In addition, asset quality and profitability are the strongest since the financial crisis 15 years ago. Nevertheless, the market tensions are likely to result in banks tightening lending conditions for the private sector further and they could fuel discussions about the effectiveness and potential adjustments of some regulations. [more]
March 9, 2023
Region:
8
The German economy – one year after. With surprisingly strong hard data for January, chances are rising that GDP might be saved from another decline in Q1. Although not yet our baseline call, this would prevent Germany from going through a technical recession. However, still heightened uncertainty and real income losses due to high inflation will likely keep investment spending and private consumption flatlining in the first half of the year. Hence, we maintain our 0% forecast for 2023 German GDP growth, although upside risks have increased since the start of the year. [more]
December 20, 2022
Region:
9
For more than a decade, European banks have sought to catch up and narrow the gap to their US peers. For many years, they were not particularly successful, due to a number of reasons: economic growth in the US outpaced that in Europe, interest rates were consistently higher (and never negative) on the other side of the Atlantic, and restructuring and capital raising needs were greater in Europe which constrained the banks’ ability to expand their business. In the past few years, however, European banks’ performance has indeed improved and they have not just made substantial progress, but also seem well positioned to finally reduce the distance to their US competitors. [more]
December 19, 2022
Region:
10
We look at the expected recession in the winter half-year 2022/23 and the onset of recovery, how inflation will peak, while the labor market loses momentum and private consumption is hit by the loss of purchasing power. Construction and Capex spending are set to deteriorate. Fiscal policy continues to lean against the headwinds but should normalize somewhat. Loan growth, both with corporates and private households, may slow substantially. In a medium-term perspective, we discuss risks for the manufacturing industry and Germany’s geopolitical and competitive position. [more]
November 17, 2022
Region:
11
The European banking sector is currently enjoying a sweet spot. Recent interest rate increases by central banks in most advanced economies combined with strong credit growth are having a pronounced positive impact on revenues, while loan loss provisions remain fairly low so far, although they have started to climb. Bottom line, growth in administrative expenses, individual banks’ tax and litigation payments as well as Russia-related losses have reduced net income, but the industry is still on track for a decent full-year result. More importantly, fundamentally higher-for-longer interest rates may support banks’ business prospects also in the medium term. [more]
September 2, 2022
Region:
12
For the financial sector, sustainable finance is steadily moving up the priority list. It is about incorporating environmental, social and governance (ESG) considerations into finance. The global volume of ESG-labelled assets grew to USD 35 tr in 2020 and may reach USD 41 tr by the end of this year. Despite strong growth, sustainable finance still faces obstacles such as the absence of a universally accepted definition of ESG and a lack of data on ESG metrics. Regulation is trying to keep pace with market dynamics to facilitate the flow of funds into sustainable activities. Key initiatives include the establishment of taxonomies, disclosure rules and product-related regulation. In the short term, sustainable finance faces headwinds from adverse macroeconomic conditions and emerging regulatory requirements, but the fundamental growth drivers remain intact. [more]
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