Primary contacts Gavin Gunning Melbourne +61-3-9631-2092 gavin.gunning@spglobal.com Emmanuel Volland Paris +33-14-420-6696 emmanuel.volland@spglobal.com Alexandre Birry London +44-20-7176-7108 alexandre.birry@spglobal.com Secondary contacts Brendan Browne New York +1-212-438-7399 brendan.browne@spglobal.com Cynthia Cohen Freue Buenos Aires +54-11-4891-2161 cynthia.cohenfreue@spglobal.com Elena Iparraguirre Madrid +34-91-389-6963 elena.iparraguirre@spglobal.com Osman Sattar London +44-20-7176-7198 osman.sattar@spglobal.com Mohamed Damak Dubai +9-714-372-7153 mohamed.damak@spglobal.com Contacts continued on page 106 Global Banks Country-By-Country Outlook 2024 Forewarned Is Forearmed November 16, 2023 This report does not constitute a rating actionChart 1 Stable outlook trends but buffers may face a squeeze Rating and outlook distribution Stable outlooksdominate at 79%Data as of Oct. 31, 2023. Source: S&P Global Ratings. Our outlook for the global banking sector for 2024 is for continuing ratings stability. We see limited potential for upside ratings momentum but several key risks that could negatively affect bank ratings should a downside scenario emerge outside our base case. Banks will face headwinds and uncertainties. The weak economic outlook will test banks, as will the CRE sector--which is enduring a significant downturn in some jurisdictions--and high public and public sector indebtedness amid high interest rates. We anticipate that most bank ratings will remain resilient in the face of these key risks unless they intensify materially or become more entrenched. 0%10%20%30%40%50%AAAAAABBBBBBLower0%20%40%60%80% 100%Asia-PacificEmerging EMEAEuropeLatin AmericaNorth AmericaCW NegativeNegativeStablePositiveKey takeaways • Our outlook for global banks remains steady. As of Oct. 31, 2023, 79% of bank ratingoutlooks were stable. This resilience is largely due to solid capitalization, improvedprofitability, and still sound asset quality.• The weak economic outlook for 2024 will test banks' business volumes, asset quality,and financing conditions. Positively, most banks' earnings will continue to benefit fromhigh interest rates.• Key risks could intensify. Although not our base case, a marked deterioration ofeconomic conditions in Europe, the U.S., and China is possible, while inflation remainshigh. The Russia-Ukraine and Israel-Hamas wars bring spillover risks.• Commercial real estate (CRE) markets are suffering a significant downturn in somejurisdictions, with demand and prices falling, especially in the U.S., China, and someEuropean countries. Related losses, although manageable, will be felt for a few years.• We continue to anticipate increasing credit divergence. Pressure will be morepronounced for nonbank financial institutions (NBFIs) and entities with weak fundingprofiles or those directly exposed to geopolitical riskNov. 16, 2023 2spglobal.com/ratings Global Banks Country-By-Country Outlook 2024 |...
