Banks could benefit in the short term from clients drawing down revolving credit facilities, but their earnings may face a challenging period after that if the loans sour and need to be written down, according to analysis by Berenberg. Berenberg estimated the use of RCFs by corporate customers had gone from 8% at the end of last year to as much as 50% now as businesses raced to shore up their cash levels in the wake of the economic slowdown.
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