DBRS Publishes “DBRS: U.S. Banks Report Noisy 4Q17 Results; Core Fundamentals Remain Strong”

DBRS, Inc. (DBRS) published its commentary on the results of U.S. banks titled “DBRS: U.S. Banks Report Noisy 4Q17 Results; Core Fundamentals Remain Strong.”

The commentary looks at key industry trends and credit fundamentals. Summary highlights of this quarter’s commentary include:

• DBRS views the 4Q17 performance of U.S. banks favorably, although financial results were quite noisy due to the enactment of U.S. tax reform. For the full year 2017, the median DBRS-rated U.S. bank generated a return on average assets of 1.06% (up from 0.93% in 2016), reflecting another solid annual performance.
• Economic and financial market indicators do not suggest a significant deviation from the current environment in the near-term, even as the recovery is approaching a decade in length. DBRS expects continued favorable results from U.S. banks in 2018, recognizing that numerous headwinds still persist.
• DBRS expects that U.S. banks would be able to withstand any potential disruption, considering the strength of U.S. bank balance sheets, the post-crisis improvements banks have made in their risk management practices and regulation that has strengthened balance sheets.
• Overall, DBRS expects modest upward ratings migration in 2018.

DBRS also reviews the rating actions for DBRS-rated banks taken over the past quarter.

This commentary is published quarterly.