Global 2025 FIG Credit Outlook: Financial Institutions Benefitting from Benign Operating Environment, but Downside Risks Increase

Morningstar DBRS has released a commentary on the 2025 Global Financial Institutions Outlook. Key highlights include:

-- Our credit outlook across the financial institution sector is broadly stable, as the operating environment supports our existing credit ratings.

-- Compared to last year, more sectors are benefitting from a better operating environment, including still constructive, albeit lower, interest rates and stable-to-improving economic growth rates.

-- Our outlook is subject to downside risks, mainly because of geopolitical factors such as tariffs.

"European bank revenues are likely to be adversely affected by rate cuts, whereas for Canadian banks potential U.S. tariffs create significant uncertainties" said Sonja Förster, Senior Vice President, European Financial Institutions at Morningstar DBRS. "However, these factors do not represent a rating risk, as underlying fundamentals of European and Canadian banks are generally strong."