Bi-Weekly Report 21 January-3 February 2020


Banking sector profitability moderated in FY:19, amid a challenging environment

Profitability is set to ease further in FY:20, but remain solid



PNL Government collapses following a vote of no confidence, opening the door to snap elections

The budget deficit rose sharply to a 9-year high of 4.6% of GDP in FY:19, surpassing its initial target (and broadly equivalent FY:18 outcome) of 2.8%

The budget deficit is set to exceed the critical EU threshold of 3.0% of GDP for a 2nd consecutive year in FY:20



The underlying profitability of the banking system is estimated to have improved markedly in H1:19, with ROAE reaching a post-global crisis high

The banking sector bottom line is estimated to have remained strong in H2:19 and is set to improve further in FY:20, keeping ROAE in double digits for a 4th successive year



Growth in customer deposits (FX-adjusted) remained strong in 2019, despite the moderation in economic activity

Credit growth, adjusted for large write-offs and FX variations reached a 8-year high of c. 6.7% in 2019



Bi-Weekly Report 21 January-3 February 2020

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