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6 Aug 2015
Moody’s upgrades UK banking system outlook to stable from negative
FXStreet (Mumbai) - Moody's Investors Service has changed the outlook on the UK banking system to stable from negative, reflecting expectations that banks will benefit from a favourable operating environment over the next 12-18 months.
According to Moody's, healthy economic growth in the UK will have a positive effect on banks' operating conditions. The rating agency expects UK GDP growth of 2.7% in 2015 and 2.4% in 2016.
"We expect most banks' balance sheets to improve in 2015, with enhancements in their capital and leverage metrics as lenders position themselves for more stringent regulatory requirements," says Carlos Suarez Duarte, a senior analyst at Moody's.
Rate hike in H1 2016
As per the rating agency the banks’ asset quality shall remain strong despite the probability of a gradual and moderate increases in the Bank of England's base rate. The agency expects rates to rise in the first half of 2016.
“Moreover, stricter mortgage affordability rules, coupled with enhanced risk appetite frameworks among rated institutions, should prevent a material deterioration in asset quality in the event of an economic downturn”, according to Moody's.
According to Moody's, healthy economic growth in the UK will have a positive effect on banks' operating conditions. The rating agency expects UK GDP growth of 2.7% in 2015 and 2.4% in 2016.
"We expect most banks' balance sheets to improve in 2015, with enhancements in their capital and leverage metrics as lenders position themselves for more stringent regulatory requirements," says Carlos Suarez Duarte, a senior analyst at Moody's.
Rate hike in H1 2016
As per the rating agency the banks’ asset quality shall remain strong despite the probability of a gradual and moderate increases in the Bank of England's base rate. The agency expects rates to rise in the first half of 2016.
“Moreover, stricter mortgage affordability rules, coupled with enhanced risk appetite frameworks among rated institutions, should prevent a material deterioration in asset quality in the event of an economic downturn”, according to Moody's.