Financial Institutions
Monetary policy, tech disruption and evolving regulations are forcing financial institutions to take a hard look at their business models. You will find here some insights into how these trends are affecting the credit profile of our broad coverage of banks, asset managers, clearing houses and other non-bank financial institutions.
U.K. Banking Outlook 2026: Another Solid Year Ahead
Our stable outlooks on all U.K. bank ratings indicate that we expect the sector to remain resilient in 2026. The sector has robust earnings prospects due to rising structural hedge yields and cost discipline, and we expect continued growth in shareholder distributions. We anticipate that some banks will lower their medium-term regulatory capital guidance to reflect Basel 3.1 implementation in January 2027 and an associated reduction in Pillar 2A buffers. We expect credit loss charges will increase moderately but remain close to the historical average.
Economic Research: Banks Call For Clarity On ECB's Liquidity Tools After Quantitative Tightening Ends
The conclusion of the ECB's quantitative tightening programs signals a shift in how banks will manage their future liquidity needs. Therefore, we see an urgent need for greater clarity regarding the tools that the ECB will use to provide liquidity to banks in future. Markets are particularly keen to hear more about two measures under consideration: new structural LTROs and a structural bond portfolio.
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