Global banks to rake in solid profits in 2023: Moody's


Chennai, Dec 2 (IANS): Global banks will rake in solid profits in 2023 shielded from an increase in delinquent loans, rising interest rates and solid reserves, said Moody's Investors Service on Friday.

"Banks will report solid profits in 2023," said Edoardo Calandro, VP-Senior Credit Officer at Moody's.

"Rising interest margins will enable continued capital generation o n top of already strong capital, while liquidity and funding will remain robust, even as gloomy economic conditions across much of the world cause loan performance to deteriorate. Bank creditworthiness will remain broadly stable," Calandro added.

According to Moody's banks in North America, the Middle East, some Western European countries and Asia Pacific (excluding China) will benefit most from higher rates.

Problem loan formation will likely be greater in highly dollarized emerging markets, while many banks in energy-producing countries will benefit from higher oil prices, Moody's said.

Loan losses will be kept contained by stricter underwriting standards over the last 10 years, reduced exposure to riskier asset classes and strong loan-loss provisioning.

Capital ratios will remain broadly stable across regions, as solid profitability allows banks to generate capital internally and as regulatory requirements remain high.

Profit retention will outpace rising risk weighted assets and shareholder distributions, Moody's said.

Deposits will likely remain well above pre-pandemic levels for at least the next 12 to 18 months, and bail-in debt requirements have now been largely met in most advanced economies.

This, and a strong starting point mean that banks will remain well funded throughout 2023 even while central banks continue to drain liquidity through quantitative tightening, Moody's said.

 

  

Top Stories


Leave a Comment

Title: Global banks to rake in solid profits in 2023: Moody's



You have 2000 characters left.

Disclaimer:

Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Daijiworld.com will not be responsible for any defamatory message posted under this article.

Please note that sending false messages to insult, defame, intimidate, mislead or deceive people or to intentionally cause public disorder is punishable under law. It is obligatory on Daijiworld to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using daijiworld will be purely at your own risk, and in no way will Daijiworld.com be held responsible.