Moody’s Investors Service is out with its latest outlook report on the European banks, with the key points found below.
Outlook for European banks has changed to negative from stable.
Weakening economic growth in much of the region will cause banks’ loan quality and profitability to decline.
In UK, outlook for banks is also negative as Brexit-related uncertainty will weaken operating conditions and slow loan demand
Outlook for Euro-area banks is negative as economic slowdown, continued accommodative monetary policy will erode already weak profitability.
In CEE, economic growth will slow but it will still outperform the Euro area and foster business opportunities for banks.
In the Nordic countries, economic growth will slow but remain supportive.
If trade tensions escalate, between the US and China or US and EU, there would be a bigger deterioration in European banks.