Moody's cited sluggish growth and political and trade uncertainties as risks for financial institutions across emerging markets in 2020, saying slower economic activity could lead to a more challenging business climate.

Overall, the outlook for emerging market banks is negative, while that of insurers is more stable.

Moody's outlook for banks and finance companies in emerging Asian economies is negative, amid slow economic and trade growth in Asia, with the U.S.-China trade dispute and its spillover effects "a key risk" for banks. This, when coupled with monetary policy easing, will lead to a difficult operating environment for banks and depress their interest margins.

The outlook for insurance companies in emerging Asian economies is stable, backed by improving product mixes, solid capitalization and risk-oriented regulations.

The rating agency expects "generally good earnings" and adequate solvency and liquidity levels from companies in emerging Asian economies.

Moody's overall negative outlook on emerging European, Middle Eastern and African economies is driven by tough operating conditions, although strong liquidity and capital metrics mitigate risks.

Banks in emerging EMEA economies carry a negative outlook, including the banking sectors in Turkey, Nigeria and South Africa, but banking systems in Central and Eastern Europe and the Commonwealth of Independent States mostly have a stable outlook.

Moody's expects banks to maintain their capital levels and high liquidity buffers, while they take a hit to profitability given lackluster growth opportunities and increased provisions for loan losses.

The insurance sector in emerging EMEA economies also has a stable outlook.

Meanwhile, emerging Latin American economies' stable outlook is driven by asset quality and funding support, but risks to growth and policy shifts remain.