
The evolution of reduced provisions for expected credit losses in the first half of 2021 demonstrates that the banking sector is clearly more optimistic in regard to its global economic outlook for the future. Throughout the EU, the Irish Banks remain among the most prudent banks in their coverage of exposures for expected credit losses. In addition, the significant level of overlays applied by banks still shows that models used for the estimation of expected credit losses may not currently align to the current economic context and that the estimation process is particularly complex and remains difficult to predict.
Michael Tuohy Partner, Audit & Assurance