Fitch Ratings-London: The neutral sector mid-year outlook for banks in 2022 belies a significant change in their operating environment. The economic outlook is more uncertain than it was six months ago, and risks are skewed to the downside, particularly for emerging-market economies. We expect business conditions for banks to deteriorate versus 2021, as global growth slows amidst a sustained increase in inflation. Asset quality is also likely to deteriorate moderately. However, we expect these factors to be partly offset by better margins, with ratings also cushioned by accumulated loan loss allowances and robust capital buffers.
James Longsdon, Global Head of Banks at Fitch Ratings, says: “Higher rates will help margins and profitability, but there are downside risks too, particularly for emerging market economies.”
The special report "Fitch Ratings 2022 Mid-Year Outlook: Global Banks" is available via the link above or at www.fitchratings.com.
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Media Relations: Louisa Williams, London, Tel: +44 20 3530 2452, Email: louisa.williams@thefitchgroup.com
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