Less Volatility Expected for Banking Ratings in 2018

A shift in global bank ratings at the end of last year indicates less volatility in 2018, as Fitch Ratings reports stable outlooks are at their highest mark in recent years.

According to a Fitch report on Feb. 9, the share of positive outlooks nearly doubled year-over-year, despite being outweighed by negative outlooks toward the end of 2017. Upgrades and downgrades remained around the same levels, data showed, while the share of negative outlooks became stable after rating downgrades.

Thanks to revisions, Europe is on balance positive, Fitch said; however, emerging markets in the Middle East, Africa and the Americas are balance negative.

“We changed 65 bank Issuer Default Ratings in 2H17, down from a record high of 92 in 1H17,” Fitch said. “… Upgrades were concentrated in Europe, where the economic recovery is improving banks’ operating environments, while most downgrades were in emerging markets … mostly driven by sovereign downgrades.”

Qatar experienced the most downgrades (nine) in 2H17, the report said.

—Andrew Michaels, editorial associate

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