Live Markets: No near-term respite for global banks - Moody's

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04/12/2023 18:15

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    NO NEAR-TERM RESPITE FOR GLOBAL BANKS - MOODY'S
    Global banks are sailing into a hurricane of economic risks
in 2024 that can squeeze their profitability, ratings agency
Moody's wrote in a note on Monday. 
    Effects of central banks' interest rate hikes will prompt
banks to build up bigger provisions to guard against potential
loan defaults, Moody's said. 
    Borrowers' deteriorating financial health could also leave
many of them without the ability to repay their loans, further
straining banks' profits, the agency added.
    The commentary adds to concerns about the health of the
industry, which is already under pressure as the boost from
nearly two years of rate hikes fade. 
    Proposals to make capital rules stricter and an uneven
recovery in dealmaking are also challenging the industry. 
    The trend of paying out higher interest on deposits to keep
customers from fleeing to alternatives will likely persist into
next year and drive up costs, Moody's added. 
    A bright spot for customers would be the enhanced safety of
banks. Partly owing to regulatory overhaul and also because of
prudent dividends, lenders would be well-capitalized, the agency
said.    
    
    (Niket Nishant)
     *****
    
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    FOR MONDAY'S LIVE MARKETS POSTS PRIOR TO 0900 EST/1400 GMT -
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