Coronavirus Scars VP Bank's Loan Portfolio
The coronavirus requires a larger valuation adjustment in VP Bank's loan portfolio – due to one individual position of approximately 20 million Swiss francs.
The extent of the impact that the coronavirus is having on society and the economy, and thus on the financial markets as well, is becoming increasingly clear.
High market losses over a very short period of time and extremely high volatility that has never been witnessed before are causing a strain not only on the financial market as a whole but also on VP Bank Group. At the moment, however, the coronavirus crisis is leaving a mark on the loan portfolio of VP Bank Group, requiring a larger valuation adjustment to one individual position of approximately 20 million Swiss francs, the bank announced on Monday.
Supplemental stress tests on outstanding loans that have regularly been performing over the past several days currently do not show any additional need for a provision, the bank said. The quality of VP Bank Group’s loan portfolio remains high, according to further information.
Because of the uncertain situation surrounding the coronavirus, the bank cannot make any reliable forecasts about further developments in the financial markets and thus about annual results, the lender said.
«However, we can today state that apart from this larger valuation adjustment on one individual position in the first quarter of 2020, VP Bank Group posted results that on whole are satisfactory. We are particularly pleased that because of the essentially defensive orientation of the portfolios, asset management has to date performed well compared with the rest of the sector,» the firm added.
