McKenzie & Company, a consultancy, said, in a report, that most banks around the world may face another 4 years of declining profits in the consequences of the "Covid-19" pandemic.
By 2024, the pandemic will require $ 2.7 trillion in expense provisions for loan losses, the company added, and 3.7 trillion in revenue will be permanently lost due to economic challenges and continued low interest rates.
Globally, the return on equity, an important measure of profitability, is also expected to decline to 1.5% in 2021 from 8.9% in 2019.
Most enterprises will not recover the profitability of 2019 for five years unless they improve their productivity and management of capital, and McKinsey & Co added that the merger may be a solution for some of them.
On the other hand, said Kosik Raggopal, one of the authors of the report, "There is an urgent need for banks to increase their productivity."