The Banking Executive Magazine - July 2022 Issue

EUROPE'S BANKS BRACE FOR BUMPY RIDE AFTER CHEAP MONEY DECADE Virgin Money ENTERS BUY NOW PAY LATER MARKET Virgin Money will enter the fast- growing 'buy now pay later' market, the British bank said, joining other mainstream lenders pushing into the lucrative but sometimes controver- sial business. Virgin will offer a credit card that al- lows customers to spread repay- ments over a number of months, it said, with instalment fees added if they repay in nine months or longer. 'Buy now pay later' products have soared in popularity in recent years with customers buying anything from clothes to electronic gadgets, but have attracted criticism from law- makers and watchdogs over the sometimes high rates of interest charged. the BANKING EXECUTIVE 34 ISSUE 163 JULY 2022 Europe's banks, facing a potential economic storm and a rise in bor- rowing costs for the first time in more than a decade, are set to show their weak spots when they update investors on how their busi- ness has fared this year. They have already had to cope with soaring inflation and rising in- terest rates, a pincer movement that squeezes borrowers, plus the Ukraine conflict which has rattled Europe's economy, including by constraining its energy supplies. UBS, Deutsche Bank, Credit Su- isse, BNP Paribas and UniCredit could set the tone for investors when they report second-quarter results next week. On one hand, higher interest rates are good for banks as they can charge more for loans. But they suffer if customers, struggling with