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"The outlook for world economies in 2020 has substantially worsened in the past two months. The impact and duration of the COVID-19 crisis will likely lead to higher ECL [expected credit losses] and put pressure on revenue due to lower customer activity levels and reduced global interest rates."
A grim outlook from the global HSBC bank, which has found itself in choppy waters after its first-quarter profits nearly halved. The bank was forced to put aside billions of dollars to cover bad loans – a situation that is only expected to worsen amid the coronavirus pandemic.
HSBC also warned there were only difficulties ahead and said the extra charges were mainly due to the "global impact of COVID-19 and weakening oil prices."
The oil industry has been one of the worst-hit by the coronavirus pandemic. With demand dropping because fewer and fewer of us are filling up our cars and airplanes not refuelling as much, oil conglomerates are feeling the sting. Oil and gas giant BP hasn't fared well as its first-quarter profits tumbled by a huge 66 percent.
And in aviation industry news, Lufthansa might seek some form of protection from creditors while it is still in talks with Germany's government about a 9 billion euro [$9.8 billion] relief package.
Speaking of relief and stimulus packages, scroll to the end for our graphic comparing fiscal responses by a selection of European countries to protect their economies from the coronavirus pandemic.
Enjoy reading,
Arij Limam
Digital correspondent
**P.S. Did you know we send this briefing by email, too? **
You can sign up to receive it here.
HSBC , Europe's biggest bank by assets, has warned of further difficulties ahead after its** first-quarter profits nearly halved** as it set aside $3 billion to cover bad loans, a figure expected to rise amid the coronavirus pandemic.
Oil and gas giant BP's first-quarter profits tumbled by 66 percent as the coronavirus crisis hit oil demand, and the energy major's debt rose sharply as it warned of exceptional uncertainty ahead, following a sharp reduction in the need for its products.
Lufthansa and the German government are pursuing a nine billion euro ($9.8 billion) rescue package for the airline , according to Reuters, but gave no timing for an agreement after sources said talks were ongoing.
Scandinavian airline SAS has said it could reduce its workforce by up to 5,000 full-time positions due to plunging demand and travel restrictions during the coronavirus outbreak. The company previously said it would temporarily lay off up to 10,000 employees, or 90 percent of its total workforce.
Denmark has approved the construction of the €7 billion ($7.6 billion) **Fehmarnbelt underwater tunnel, **which will reduce travel time between the country and Germany to just a few minutes. Although work has been delayed to January next year, the tunnel is forecast to open in mid-2029.
Swiss engineering company ABB reported first-quarter results that exceeded market expectations , including an increase in orders, buoying its shares, although it has warned that COVID-19 lockdowns would trigger a sharp drop in demand in the months ahead.
The lockdown in the UK has put 82 billion pounds ($102 billion) of home sales on hold , with the housing market in a state of "suspended animation," according to a report by property company Zoopla, which added that completed home sales this year will be half the 2019 level.
South Korea's exports contracted at the sharpest pace in nearly 11 years in April , with shipments expected to have shrunk 25.4 percent year-on-year, as the coronavirus pandemic caused disruptions to global supply chains, a new Reuters poll has shown.
General Motors, Ford and Fiat Chrysler have set 18 May as a target to resume some production at their U.S. factories , following talks with the auto workers union, after plants were shut down in March due to COVID-19, the
Wall Street Journal
reported.
With the help of China, Serbia has built a new COVID-19 testing lab in Belgrade that has almost doubled the country's capacity to diagnose the virus, a key step to fight a new surge in cases.
02:07
Simon Chadwick is a professor at the Centre for the Eurasian Sport Industry and works in Paris and China. He spoke to CGTN Europe's The Agenda program about the "incalculable" impact of COVID-19 on global sport and said that based on the business in China, Europe would be too optimistic to anticipate sports resuming in the coming weeks.
What is the impact of COVID-19 on sport?
There are many estimates often running into the billions of pounds, billions of dollars, but my view would be that the impact has been almost incalculable. Much of the attention across the world has been focused on, for example, the English Premier League, on Formula One, on the Olympics, and yet global sport is much, much more than that.
There are events taking place at lots of different levels from the elite professional level through to the grassroots level across numerous sports. You have suppliers, the likes of organizations, businesses, supplying merchandise, equipment, things like turf, football boots, and so the impact has been so wide, so profound, that even figures like $4 billion, $5 billion – which I've seen over the course of the past week – are probably really underestimating the actual situation.
You've worked extensively in China. How long before stadiums are opened there?
We had a little bit of a false dawn in China two or three weeks ago, when it was beginning to look like professional sport might start again. There had already been an announcement that people could congregate in public and go to, for example, parks and kick a ball around, so there were positive signs. And we saw that, for instance, basketball in China, rather than getting restarted, was postponed once again.
And so, for a long time, I've really been looking eastwards to China as a signal for what might come in Europe seven, eight, nine weeks later. But at the moment, I'm not seeing any promising signs coming out of China. And so for people across Europe who anticipate the restarting of sports at some stage over the next three or four weeks, I think that's very premature based on the Chinese experience.
What about playing games behind closed doors, is that financially viable?
I've recently been talking to one of the world's biggest football clubs and they are adamant that they want to stage games behind closed doors and get the season finished. This is really important for them in terms of fulfilling contracts with sponsors, with broadcasters, it would be an important source of revenue for them.
For many of these big organizations, big clubs, big sports, they're drawing large revenues from broadcasters rather than from ticket sales and so they can go ahead. Longer term, it becomes more problematic, I think, because it fundamentally changes the nature of the game, crowds are intrinsic to the sport product, so they create noise and atmosphere and tension.
There have been some interesting developments in recent weeks. So, for instance, drive-in football where you can drive outside a football stadium and the game being played in the stadium is then broadcast on big screens. But that fundamentally changes why we go to watch sports and so, therefore, I think, again, we've got to reserve judgment about what happens in the future.
Driving football, driving sport, playing behind closed doors, these kinds of developments will help us get through the short term, but I'm not sure that is necessarily the long-term future of sport.
Is there an upside to any of this, perhaps this is a chance for the administrators, the sponsors, the clubs themselves to stand back and look at the game anew ** – how it's administered, how it's run, how the games are played?**
I guess in existential terms, in policy terms, in governance terms, we're at a very interesting point in the history of sport, and that is simply from here on in what do we want sport to be like?
A lot of people have been very critical of the way in which commercial sport, global sport has developed over the past two decades and numbers of people sense an opportunity to reset to a time in the past.
I don't necessarily think we're going back to the past, but I think what we can all do is begin to look towards the future and think about what the shape of world sport should look like. And then, I guess for all of us, academics, for policymakers, politicians, people working in sport, directors of clubs, event managers and so forth, we have to begin to express our views and begin to shape the agenda for the period during which the virus eventually begins to dissipate.
From last month, governments across Europe have been announcing and implementing various fiscal measures to contain the economic fallout of the coronavirus pandemic.
The graph below summarizes and compares the discretionary fiscal responses of a selection of European countries according to an analysis by think tank Bruegel, which found that Germany is currently offering the most wide-ranging coronavirus financial aid and stimulus plan, amounting to more than $2.2 trillion ** – 60 percent of the country's economic output in 2019.**
