European Banking: Earnings Trends and Outlook Amid Global Trade Tensions
Banking OrganizationsSummary
Key Highlights
-- Earnings are retreating from the high 2024 levels but are still strong.
-- Pressure on net interest income is partly offset by increases in noninterest income, and banks in southern Europe still benefit from materially lower loan loss provisions.
-- Asset quality has remained strong but could experience some pressure going forward.
-- Capital ratios have started to decrease as banks are seeking to reduce capital cushions.
"U.S. tariffs and an escalating conflict in the Middle East pose risks to the economic growth outlook in Europe and affect individual sectors in particular." Sonja Förster, Senior Vice President, European Financial Institution Ratings said. "However, given the earnings generation and solid capital cushions our stable fundamental outlook for European banks remains unchanged."
Available Documents
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