Market Developments for Credit Institutions 2019

Published 11-08-2020

Danish credit institutions are well-capitalised and have had moderate lending growth since 2016. This provides a good starting point for extending credit to households and companies, which need temporary liquidity because of the COVID-19 crisis.

The macroeconomic outlook has deteriorated significantly with the drastic anti-infection measures introduced in Denmark as well as the rest of the world. Indicators such as car sales and payment transactions show that the economy is currently in sharp decline, and the published scenarios for the Danish economy from Danmarks Nationalbank, the Ministry of Finance and the Danish Economic Councils include a fall in GDP of 3% or more in 2020. The deteriorating finances for households and businesses will inevitably lead to increased impairments for credit institutions.

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Last updated 11-08-2020