French banks started 2020 in a generally buoyant mood. Most of their key performance metrics improved over the previous 12 months with profitability, asset and Tier 1 capital growth all looking healthy – results achieved despite the difficulties posed by negative interest rates and the pressures of a changing regulatory landscape.
But the spread of the Covid-19 virus across France, and beyond, has almost certainly dented the sector’s near- to medium-term prospects. With economic activity in the country brought to an effective standstill, as elsewhere, the outlook for the remainder of 2020 will depend to no small degree on the government’s response to the crisis.
