Brexit Impact: Goldman Trims Estimates For U.K., European Banks

Following the Brexit referendum result, analysts at Goldman Sachs have trimmed their net income estimates for European banks by €32 billion and for U.K. banks by €10 billion for the cumulative period of 2016-18E. Jernej Omahen and colleagues published their June 28 research piece on European Banks after factoring in GS economists’ post-Brexit macro scenarios.

GS cuts U.K. real GDP estimate significantly

Close on the heels of the Brexit referendum, GS economists revised down their expectations for U.K. real GDP substantially by 1.8% to 0.2% for 2017E. They expect the U.K. to enter a technical recession in the first half of next year. Of note, BAML analysts predicted earlier that the U.K. will enter a mild recession lasting three quarters.

Omahen and team trimmed their aggregate...