Coronavirus: United Kingdom, facing worst recession on record, sees GDP drop 20.4% in Q2

The UK has seen its economy, hit by the coronavirus crisis, suffer a "record" contraction of 20.4% in the second quarter, and is officially facing its worst recession on record, agency figures show National Statistics (ONS), published Wednesday 12 August. 
Economists consider that a country enters a technical recession when it accumulates two consecutive quarters of contraction in its economy. According to the ONS, most of the contraction, which began to be felt in March, occurred in April, an entire month of containment and almost total cessation of activity in the country, which saw production collapsed by 20%.

With a very early recovery in construction sites and manufacturing activity, gross domestic product (GDP) rebounded in May by 2.4% (revised figure), followed by an acceleration in June (+8.7 %) thanks in particular to the reopening of all shops. This is the biggest contraction in the UK economy since the ONS began these quarterly statistics in 1955, he said…

The world's listed banks have lost $ 2,126.7 billion in market values since early 2020

The overall market value of banks listed on various financial markets around the world fell by $ 2,126.7 billion. This decline reflects the concern of investors and shareholders of these institutions, who fear that the current economic context will become a big risk for them.

The world's listed banks have lost $ 2,126.7 billion in market values since early 2020

The cumulative market value of banking groups listed on various financial markets around the world fell by $ 2,126.7 billion in the first 24 weeks of 2020, we learn from data provided by Capital IQ, out of a total number of 1841 companies corresponding to this description. In total, 1601 banks posted a decline in value over the period examined. Only 192 banks are experiencing an increase in their market values ​​and 50 have a stable value.

The top 30 banks in the world in terms of market value did not escape this drop, the American JP Morgan Chase & Co leading. The institution as of June 26 posted a value down 33.58% since the start of the year. However, we note that Chinese banks have resisted the best. The biggest drop in big banks in this country is noted at Industrial and Commercial Bank of China Limited (ICBC). Its market value decreased by 20.67% over the period. The other major Chinese banks present on the financial markets posted a decline of less than 10%.

This is explained by the fact that overall, the turnover of large banks which is closely linked both to the performance of the capital markets and to that of the global economy is expected to decline in 2020. The International Monetary Fund has predicted a drop in growth of around 8% for developed economies where we find most of these banks. Also, the recovery announced in 2021 (+ 4.8%) will not be enough to make up for the losses.

The coronavirus has put pressure on economic operators and governments that are clients of banks. They are forced to accept measures to restructure their loan portfolios or to provision unpaid debts. In both cases, there is a loss of income and shareholder value. The investment bank is also at half mast.

According to data provided by Reuters' data service Refinitiv, investment banking revenues worldwide reached $ 24.2 billion in the first quarter of 2020. This is down 7% from the first quarter. of 2019 and the lowest level of revenue generated by the sector over the period, since 2016.

In such a context, investors interpret this as risk factors on their investments, or their gain objectives; which justifies a fall in value of bank shares.