The latest and trending news from around the world.
ROUNDUP: Grenke senkt Gewinnprognose nach zunehmenden Zahlungsausfällen - boerse.de from
Grenke Lowers Profit Forecast After Increasing Defaults
Key Points
German financial services provider Grenke has lowered its profit forecast for the year, citing an increase in payment defaults.
The company now expects to report a profit of between 300 million and 400 million euros, down from its previous forecast of 400 million to 480 million euros.
Grenke's shares fell by more than 4% in early trading on Thursday.
In-depth Analysis
Grenke, which provides factoring, leasing, and other financial services to small and medium-sized businesses, said that the increase in payment defaults was due to the economic impact of the COVID-19 pandemic.
The company said that it had seen a "significant increase" in payment defaults in recent months, particularly in the sectors most affected by the pandemic, such as hospitality and retail.
Grenke said that it was taking a number of steps to mitigate the impact of the payment defaults, including increasing its provisions for bad debts and reducing its lending to higher-risk customers.
However, the company said that it expected the increase in payment defaults to continue in the coming months, and that this would have a negative impact on its profitability.
The profit warning from Grenke is the latest sign of the impact of the COVID-19 pandemic on the financial services sector. A number of other banks and financial services companies have also reported an increase in payment defaults in recent months.
The pandemic has caused a sharp economic downturn, leading to a decline in business activity and an increase in unemployment. This has made it more difficult for businesses to repay their debts, leading to an increase in defaults.
The increase in payment defaults is likely to continue in the coming months, as the economic impact of the pandemic is expected to continue. This could have a significant impact on the profitability of financial services companies, and could lead to further profit warnings in the sector.
