Moody’s says the outlook for global banks in 2023 is stable, as “grim economic conditions in much of the world will lead to deteriorating loan performance, but banks’ credit quality will remain stable in the year ahead” .
For the risk agency, rising interest margins will allow for continued capital generation, while liquidity and funding will remain robust.
In a report, Moody’s highlights that banks in North America, the Middle East, some countries in Western Europe and Asia-Pacific (excluding China) will benefit the most from higher interest rates.
“Funding and liquidity will remain strong. Deposits are likely to remain well above pre-pandemic levels for at least the next 12 to 18 months, and debt redemption requirements are now largely met in most advanced economies. This means that banks will remain well funded throughout 2023, even if central banks continue to drain liquidity through quantitative tightening.
However, the agency considers that banks face a weaker and more volatile macroeconomic environment, as economic growth will slow down worldwide in 2023. “High inflation, geopolitical changes and financial market volatility are harming families and companies and there is a substantial risk of new shocks in the future”, he points out.
“Therefore, loan performance will deteriorate from strong levels,” adds Moody’s.
Source: CNN Brasil
A journalist with over 7 years of experience in the news industry, currently working at World Stock Market as an author for the Entertainment section and also contributing to the Economics or finance section on a part-time basis. Has a passion for Entertainment and fashion topics, and has put in a lot of research and effort to provide accurate information to readers.
