Credit ratings
agency Moody's has upgraded its outlook for the UK banking industry to stable
from negative.
It said the change reflected the country's increasingly stable economic outlook, despite low growth prospects.
Moody's expects profitability to recover from current low levels.
Other reasons given for the more positive outlook were the continued improvement in the banks' capital as a result of new, stricter regulation.
The PRA recently told UK lenders to raise £27.1bn more in capital to cover their risks, with Royal Bank of Scotland the regulator's main cause of concern, accounting for £13.6bn of the total.
Although the ratings agency predicted that banks' profits would recover, it warned that low interest rates, as well as the cost of implementing new regulation, could hurt profitability and lead to some one-off charges.
The ratings agency said that the enforcing of the new rules would continue to create uncertainty, but that they would reduce systemic risk in the long term.
No comments:
Post a Comment