UniCredit boosted its provisions for potential loan losses by €900m in preparation for a sharp economic contraction, an early indication of the severe impact the coronavirus pandemic will have on the fragile European banking system, the Financial Times reported. Italy’s largest bank by assets made the decision after estimating that the eurozone gross domestic product will shrink 13 per cent this year, before a 10 per cent rebound in 2021, according to a statement on Wednesday. It stressed that the “unprecedented situation” made financial forecasting “difficult”.

The United Nations is calling for the creation of a global authority to help implement the temporary suspension of debt obligations from developing countries during the coronavirus pandemic, Bloomberg News reported. The proposal will enable private creditors to join the debt payments pause and allow countries use resources to fight the new illness, said Stephanie Blankenburg, head of debt and development finance at UNCTAD, the UN’s trade and development agency.

European bank stocks are trading close their steepest-ever discount to U.S. rivals and early signals show that first-quarter earnings may only reinforce the gap, Bloomberg News reported. The continent’s lenders, already in a tough spot before the coronavirus outbreak hit, are likely to detail more worrying news for their embattled investors. In Germany, Deutsche Bank AG may have seen credit trading weigh on its markets revenue while Commerzbank AG probably started to set aside more funds for troubled loans.

The co-owner of Virgin Atlantic Airways Ltd. said it’s unable to invest more in Richard Branson’s struggling U.K. airline, and raised the possibility it could face going through insolvency proceedings, Bloomberg News reported. Delta Air Lines Inc., which owns a 49% stake in Virgin Atlantic, can’t help out because it’s consumed with its own problems and has already bumped up against U.K. limits on foreign airline ownership, Ed Bastian, the U.S. company’s chief executive officer, said Thursday. “With our crisis in cash, we need to protect our own business.

The number of soured U.K. commercial property loans started rising in 2019 for the first time in eight years. Now, it’s set to skyrocket. The coronavirus outbreak will trigger as much as 10 billion pounds ($12.3 billion) of losses and write-offs on loans tied to U.K. stores and malls, according to a survey of lenders by Cass Business School. That’s after a slump in retail property saw the value of bad loans spike by more than a third last year, though to a still relatively low 2.9 billion pounds.

The collapse of Virgin Australia Holdings Ltd. after the briefest of fights indicates the world’s weakest airlines have little time to secure funds before they succumb to the coronavirus, Bloomberg News reported. The debt-laden carrier became the outbreak’s biggest airline scalp when it handed control to administrators on Tuesday. A near-halt in passenger revenue overwhelmed the Brisbane-based company in less than two months. “We should get used to news of this kind,” said Volodymyr Bilotkach, a lecturer in air-transport management at the Singapore Institute of Technology.

Offshore oil driller Valaris PLC is preparing to start talks with creditors to see if they can agree on terms for a possible bankruptcy filing, as it grapples with a $6.5 billion debt burden and an unprecedented plunge in U.S. crude prices, people familiar with the matter said on Tuesday. Reuters reported last month that the London-based company was working with debt restructuring advisers as it struggled to cope with a rig accident and falling energy prices, Reuters reported. Since then, U.S.

Spain’s economy could contract this year by more than 12% in a worst-case-scenario forecast by the country’s central bank, the first official figures that spell out the potential toll of the coronavirus pandemic on the European Union’s fourth-largest economy, Bloomberg News reported. The economic shock could push the unemployment rate to as high as 21.7% this year, undoing gains achieved in the aftermath of the 2008 global recession and the subsequent European debt crisis. At nearly 14%, Spain’s unemployment rate is already one of the highest in the developed world.

The UK arm of the Belgian-owned bakery chain Le Pain Quotidien is at risk of falling into administration within days, putting 500 jobs under threat unless a buyer is found this week, the Financial Times reported. The restructuring experts Alvarez & Marsal are running an emergency sale of the 26-site café business with the deadline for bids on Wednesday, according to people with knowledge of the process. If no buyer is found during the sale process, known as Project Sunburst according to one person, administrators will be appointed.

A push by some euro area officials to free lenders of their bad debts faces resistance from countries worried that they will bear the costs, according to people familiar with the matter, Bloomberg News reported. In northern Europe, where bad loan levels are far lower than in the south, governments and regulators led by Germany don’t yet see the need for the so-called bad bank that officials elsewhere are proposing, the people said, asking to remain anonymous because the discussions are private. The idea also raises legal questions, they said.