After a year of managing the challenges of the pandemic, the outlook on the European continent (and beyond) has only become more challenging with the crisis in Ukraine. Our thoughts and hopes are with those who struggle to see a glimpse of normality any time soon.
In this fourth edition of the State of the Banks analysis (FY21) we offer you a moment of reflection and some perspective on what might lie ahead for Dutch banks. As banks find themselves in a complex and challenging environment, we reflect on the key trends for the Dutch banking sector.
The crisis in Ukraine, still accommodating monetary policy and low interest rates, pandemic fiscal stimulus packages throughout Europe, increasing climate and environmental related risks and post-pandemic supply chain disruptions dominate boardroom agendas. At the same time, as a result of the pandemic, we have seen banks successfully accelerate the digitalization of their client service models and seen strong financial performance in line with post-pandemic economic recovery.
The ECB expects headline inflation to decline in the second half of the year, but these projections are surrounded by significant uncertainty on account of the war in Ukraine. Whether the ECB will turn the tide on its expansionary policy or is forced to act on a recession triggered by higher energy and food prices remains to be seen. We do expect the road for this year to be covered with supply chain disruptions that have already started to affect the still fragile post-pandemic economic recovery.
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Since the publication of State of the Banks FY21 on April 21st, the following corrections have been made:
 On page 4, Return on average Equity (%) has been added for Rabobank (FY21: 8.8%; FY20: 2.7%).
 On page 4, Return on average Equity (%) for de Volksbank FY21 has been corrected from 8.3% to 4.2%.
 On page 11 and 12, the values of the horizontal axes have been corrected for the graphs ‘Intensity of financed emissions’ (page 11) and ‘Average energy label residential real estate’ (page 12).