COVID-19: Impact on the banking sector COVID-19 has generated significant instability and high volatility in global capital markets. While the full impact is yet to be determined, its expected that the adverse impacts are likely to continue from the virus knock-on effects Among others, this KPMG report identifies Profitability and credit management/cost of risk as one of the areas that is likely to be most impacted by COVID-19.

Required:

Critically analyse why Profitability and credit management/cost of risk, i.e. credit risk are main concerns for banks given the COVID-19 environment, as such would have a severe impact on the banking sector globally. You can use the above source (link provided above) or any other sources as evidence to justify your arguments.