U.S. Banking Outlook 2024: Banks Prepared for a More Challenging Environment

This commentary reviews the 2024 U.S. Banking outlook detailing the increasing headwinds that banks will need to manage through over the next year.

Key highlights include:
• DBRS Morningstar’s outlook for the U.S. banking sector is relatively Stable for 2024. While there will likely be some additional Negative trends and rating downgrades, these credit rating actions will likely be limited in scope.

• While net income in 2024 will be pressured by some revenue headwinds and higher loan loss provisioning, expense control should partially mitigate these headwinds.

• DBRS Morningstar continues to view the U.S. banks as well positioned to weather a more adverse operating environment and their demonstrated ability to adapt to a more changing environment illustrates this resilience.
12/07/2023

“Looking forward, we expect some increased pressure on earnings in 2024, with higher interest rates adversely impacting weaker borrowers, leading to increased loan loss provisioning needs.” said John Mackerey, Senior Vice President – Global FIG.