Profits are nonetheless still high compared to total lending. The fall in profits is due to smaller net interest and fee income and especially due to lower value adjustments. Banks have been challenged in turning a profit from their core-business. This is due to the falling net interest income caused by very low interest rates, as well as a shift of lending towards mortgage credit institutions, who have lower interest-rate margins.
Credit institutions have since the global financial crisis counteracted this effect by increasing fee income. These have been falling in 2017 and 2018, which put pressure on core earnings.
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