U.S. Banks Report Noisy 4Q23; Well Positioned for 2024 Despite Expected Asset Quality Deterioration

This commentary reviews the 4Q23 results and outlook for U.S. banks.

Key highlights include:
-- Morningstar DBRS views 4Q23 as another solid quarter and in line with our expectations, concluding a good year amid a challenging environment.
-- Despite some expected challenges in 2024, our outlook for the U.S. banking sector is Stable.
-- In the near term, we do not expect a significant amount of changes to our bank credit ratings, with 90% of Morningstar DBRS-rated U.S. banks having Stable trends.

"While our expectation of economic growth is relatively weak, we still consider it as supportive for bank credit ratings," said Michael McTamney, CFA, Senior Vice President - Global FIG.