Credit Benchmark Says Default Risk Will Peak Late-2024 for Most EU Industries, but Tech, Telecoms, Oil & Gas and Utilities Could Rise Significantly, as Discussed in New EU Default Risk Outlook

Credit Benchmark, the provider of global consensus ratings and analytics, today said that it predicts that default risks will rise and peak in H2 2024 across most EU industries, as explained in its new EU Default Risk Outlook. Default rates are expected to mostly return to current levels in 2025 – however, some industries will remain at risk.

“EU economic growth remains weak, and rates remain high, driving the slight rise in default risk we can see across the market,” says Michael Crumpler, CEO of Credit Benchmark. “However, the data is more optimistic in Europe compared to some other major markets, and we expect this rise to level out by early next year, barring any unpleasant inflationary surprises.”

“That said, our default rate projections highlight some industry-specific risks,” explains Mr Crumpler. “EU Oil & Gas firms face an increasingly volatile outlook on geopolitical risks, not to mention a shift towards renewables adding extra pressure to the sector. Our most likely scenario shows a 19% increase in default risk for this group of companies.”

“We’ve recently seen record deteriorations in EU Technology firms, with the industry lagging the US. Our projections show a marked increase in default rates of 22%. Similarly, EU Telecoms – burdened with mounting infrastructure and interest overheads, on top of global satellite competition – points to a 16% increase in default risks, persisting into 2025,” explains Mr Crumpler.

Credit Benchmark’s new report covers 11 EU industries, representing more than 4,500 companies and legal entities, 70% of which are not rated by a major credit rating agency. This significant coverage and diversified dataset allows Credit Benchmark to make unique and credible sector-specific default risk projections for 2024/25. All of Credit Benchmark’s data and projections are based on borrower probability-of-default estimates, which are aggregated from over 40 global banks, nearly half of which are G-SIBs (Global Systemically Important Banks), and anonymized.

This report follows off the back of Credit Benchmark’s inaugural 2024 Default Risk Outlook on US Industries, published at the start of this year.

About Credit Benchmark

Credit Benchmark provides Credit Consensus Ratings and Analytics that are derived from data and internal credit risk ratings contributed by more than 40 leading global financial institutions, almost half of which are Global Systemically Important Banks (GSIBs).

The contributions are aggregated, anonymized, and published twice monthly in the form of unique Credit Consensus Ratings and Credit Indices. This means that Credit Benchmark is making the views of far more analysts publicly available than ever before.

Covering over 100,000 entities, 90% of which are unrated by any other publicly available traditional ratings methods, Credit Benchmark’s credit risk data covers around 170 countries and close to 200 industries and sub-sectors worldwide.

Credit Benchmark’s insights are trusted by a host of the largest financial institutions in the world, either to benchmark their own internal credit risk analysis against those of a global peer group, or simply to gain accurate credit risk views where none were previously available.

Credit Benchmark was founded in 2015 and is headquartered in London, with offices in New York and Bangalore.

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Contact information

Laura Saville
Head of Marketing
laura.saville@creditbenchmark.com
T: +44 20 7099 4322