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Fitch Publishes Cross-Sector Discussion Paper on Short-Term Ratings

Fitch published a Discussion Paper exploring possible changes to its approach in assigning short-term ratings, including the current correspondence table between Long-Term and Short-Term Issuer Default Ratings (IDRs). We are considering ways to offer a more differentiated analytical view of short-term risk between issuers. Fitch is seeking feedback from market participants by October 31, 2018.

Capital Woes Continue for Indian Banks

Fitch Ratings' outlook on the Indian banks sector is likely to remain negative until the banks address their weak core capital positions against mounting bad debt and poor financial performance.

CBA Results Highlight Pressure Points for Australian Banks

Fitch Ratings says the Commonwealth Bank of Australia's (CBA; AA-/Negative/aa-) full-year results to 30 June 2018 (FY18) broadly support the agency's expectation that earnings pressure would emerge for Australian banks during 2018. An increase in wholesale funding costs led to a reduction in CBA's net interest margin in 2H18, loan growth continued to slow and continued investment into the business and compliance contributed to higher expenses.

Video Roundtable

Asia-Pacific Banks’ Key Challenges

Kevin Duignan, Global Head of Financial Institutions hosts a roundtable discussion on APAC banks’ risks and opportunities – a key theme from Fitch’s Global Banking Conference in Hong Kong. He is joined by Jonathan Cornish, Head of APAC Banks; Sabine Bauer, Head of Hong Kong and Japan Banks and Grace Wu, Head of China Banks.

US Banks' Strong 2Q Results Supportive of Credit Ratings

Second-quarter results for the majority of 19 large U.S. banks showed year-over-year (YOY) improvement in revenue growth and cost controls, with a continuation of sustained benign credit quality

Turkish Banks' Negative Outlooks Reflect Multiple Risks

Depreciation of the Turkish lira, higher interest rates and slowing economic growth pose significant risks to banks' performance, asset quality, capitalisation, funding and liquidity. We expect sector performance to deteriorate in 2018 and most of the banks' ratings are still on Negative Outlook or Rating Watch Negative.

Salvadorian Banks Continue to See Limited Growth

Fitch Ratings has published a dashboard on the performance of the largest Salvadorian banks for the first half of 2018 (1H18). Fitch believes the Salvadorian banking system continues to face limited growth with narrower increment on remittances inflows after peak growth during 2017. 

2Q18 U.S. Bank Earnings: Revenue, Cost Control and Lower Taxes Spur Growth

Joo-Yung Lee, Managing Director, North America Financial Institutions, provides an overview of US bank earnings for 2Q18

Deutsche Bank Needs to Build Momentum to Reach Earnings Target

Deutsche Bank's (BBB+/Negative) 2Q18 results were affected by the bank's restructuring, but reported pre-tax profit of EUR711 million showed reasonable revenue resilience during a quarter when the bank exited business segments no longer considered core,

Global Bank Rating Trends Turn Positive

Bank upgrades (26) outnumbered downgrades (21) in 1H18 for the first time since 1H14, led by upgrades in Europe and Asia Pacific. Downgrades were dominated by emerging markets in the Americas and the Middle East and Africa, continuing the recent theme of bank rating trends being generally more negative in emerging markets.

Webcast Replay

Global Bank Regulation Review

Monsur Hussain, Fitch’s Head of Financial Institutions Research - Regulatory Policy, together with Alan Adkins, Head of Financial Institutions Central Functions and Research Group, reviewed the latest developments in global bank regulation and the impact these changes may have on credit investments.


Fitch’s Wu Discusses China Banks’ Credit Risks on Bloomberg TV

Grace Wu, Senior Director and Head of China Banks at Fitch Ratings, discusses China's move to ease credit conditions, and the implications for shadow banking, macro-prudential policies and the outlook for Chinese banks’ credit ratings. She speaks on "Bloomberg Markets: Asia."


Strong U.S. Growth Reflected in Bank Earnings

Joo-Yung Lee, Managing Director and Head of North American Banks and Global Trading and Universal Banks, discusses bank earnings in the U.S. and how a return of volatility may benefit earnings. She speaks on "Bloomberg Daybreak: Asia."  

Also on Bloomberg RadioStrength in Fundamentals Good For U.S. Banks

Macroprudential Regs Affecting APAC Banks More Than Basel

Regulators in most Asia-Pacific (APAC) markets are likely to remain proactive in their use of macroprudential measures, and this could have a greater near-term impact on banks' operating environment and credit profiles than the adoption of Basel III global standards. That said, Basel III will play an important positive role over the longer term, as rules are fully implemented.

ASEAN Banks Likely To Manage Potential Risks

Banks in ASEAN have made good progress in the aftermath of the 1997 Asian financial crisis and are now better positioned to address market volatility. The banks are aided by their strengthened regulatory frameworks and domestic crisis response mechanisms, more proactive macroprudential surveillance and stronger financial profiles. 

Asia Frontier Bank Reforms Likely to Weigh on Growth

Asia's frontier markets are pushing ahead with banking sector reforms that should ultimately improve weak regulatory frameworks and strengthen banks' buffers against shocks. However, capital shortages, asset-quality problems and regulatory efforts to address these weaknesses are likely to constrain the growth of even stronger banks over the next two years.. 

No Near-Term Rating Impact from Woori's Reorganisation

Fitch Ratings says South Korea-based Woori Bank's (Woori; A-/Stable/bbb+) plan to return to a bank holding-company structure in January 2019 would not have immediate implications for the bank's ratings. Woori's Issuer Default Ratings are driven by an extremely high probability of support from the Korean sovereign (AA-/Stable).

Rating Action

Fitch Upgrades Mongolia's Khan Bank and XacBank to 'B'; Outlook Stable

Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) on Mongolia-based Khan Bank LLC and XacBank LLC to 'B' from 'B-' and their Viability Ratings to 'b' from 'b-'. The Outlooks on the banks' Long-Term IDRs are Stable. 

Korean Banks Supported by Improved Operating Environment

South Korea's banks are likely to continue enjoying benign credit costs despite heightened uncertainties especially from increasing global trade protectionism and the US Fed's policy rate hikes, says Fitch Ratings in its South Korean Banks Update presentation slides, which illustrate the banking system's key developments and challenges.

EU Stress Test Generally Tougher but Methodology Changes May Limit Capital Depletion

The adverse scenario applies an 8.3% deviation of EU GDP from the baseline level in 2020 and fears around a Nordic asset bubble and Brexit lead to deep unemployment and real-estate price shocks for Denmark, Sweden and the UK.

rating actions

Fitch Reviews Global Trading and Universal Banks

Our rating action highlight Fitch's view that solid company profiles and improved risk appetite are important factors that drive the GTUBs' ability to generate sound earnings. As global operating groups, the GTUBs are subject to regulatory scrutiny in a wide range of jurisdictions and have to meet regulators' expectations.

Teleconferece ReplayGlobal Trading and Universal Banks Peer Review


rating action

Credit Suisse Group's Outlook Revised to Positive; Affirms 'A-'

We expect the group's strategy will gradually result in an improving and less volatile performance as losses from the non-core Strategic Resolution Unit shrink and large conduct issues have been resolved, thus reducing uncertainty.

Indonesian Bank Buffers Cushion Against Market Volatility

Indonesian banks are moderately vulnerable to possible market, credit and liquidity risks arising from US monetary tightening. However, the profitability and capitalisation of the large banks are strong enough to provide a cushion against the potential negative effects, according to a Stress Test. 

Canadian Bank Bail-In Completes Credible DSIB Regulation

Canadian bank bail-in rules, which come into effect on Sept. 23, finalize a credible resolution framework for Canadian domestic systemically important banks (DSIBs). With the bail-in, total loss absorbing capacity (TLAC) and nonviability contingent capital (NVCC) requirements in place, Canada has completed the main tenets of an orderly resolution for a failing or failed DSIB.

China Bank Reform Positive But Too Soon for Mass Upgrades

China's tightened regulatory stance has slowed the build-up in financial-sector risks and should help improve the financial system's overall stability. However, Fitch Ratings does not believe these measures have reduced risks meaningfully enough to warrant the type of sector-wide bank rating upgrades recently made by Moody's.

Strong Franchises Help Major NZ Banks Offset High Macro Risks

The strength of the domestic franchises of the four largest New Zealand banks supports their respective Viability Ratings and helps to offset continued high macroeconomic risks.

Bank of Ireland Ambitions Reflect Progress, but Add Risk

Bank of Ireland's plans to grow its loan book to about EUR90 billion by end-2021, up 20% from end-2017, reflect its strengthened capital position, improving asset quality and a favourable domestic economic environment.

2018 Global Banking Conference NY

Regulation: Will the Reins Be Loosened?

In a discussion lead by Joo-Young Lee, Head of N. America Banks, Christopher Wolfe, Managing Director, covers the benefits of routine stress testing, how regulations support bank fundamentals & the effect of the Dodd-Frank rollback on small banks

Credit Perspectives on South African Banks

Andrew Parkinson, a Director in our Financial Institutions team in London, discusses the outlook for the South African banking sector and the relationship between bank and sovereign ratings.

Tunisia Bank Reforms Inch Ahead Despite Economic Pressure

Tunisian banking regulation is slowly improving from a weak base, which could be credit positive for banks in the long term. But it is likely to be several years before Tunisia's work with the IMF to strengthen banking supervision and move towards international standards of reporting and transparency meaningfully improve banks' credit quality. 

Video: Upgrade of China’s State Banks

Grace Wu, Head of China Bank Ratings, discusses the recent upgrade of the standalone viability ratings of three major Chinese state banks. She explains why these banks are less affected by China’s challenging operating environment.

Credit Hotspot: Italian Banks

Latest: Unlikely-to-Pay Loans Widen Italian Special Servicing

HK Banks' China Growth May Signal Rising Risk Appetite

Foreign banks' mainland China exposure reached a new record high in 2017 and is likely to rise further this year. Data released for Hong Kong already points to continued strong growth in 1Q18. 

rating action

Turkish Banks' Ratings on Watch Negative

The RWNs placed on all Turkish banks' VRs reflect risks to their performance, asset quality, capitalisation and, in most cases, liquidity and funding profiles following a recent period of increased market volatility.

2018 Global Banking Conference - New York

The Future of Risk: Crypto & Blockchain​

Kevin Duignan, Global Head of Financial Institutions, joins The Wall Street Journal’s Paul Vigna at Fitch’s Global Banking Conference in New York, for a fireside chat on cyber risk and cryptocurrencies.

Volcker 2.0 to Cut Compliance Costs, Facilitate Trading

The Federal Reserve's notice of proposed rulemaking (NPR) simplifying the Volcker Rule would reduce compliance and regulatory requirements associated with the rule. The proposed rule is more activities-based. Banks with limited or little trading activities will see the most relief. 

Impact on Risk Transfer Transactions Likely from New Basel Framework

The new Basel framework for securitisations to impact capital charges for retained risk of capital relief transactions, potentially reducing the capital relief benefit. This may lead to lenders having to execute financial guarantees on second-loss positions in order to achieve the same amount of capital relief. 

Bail-in May Become More Complex For Mid-Sized EU Banks

Proposed amendments to the EU Bank Recovery and Resolution Directive regarding minimum levels of bail-inable subordinated debt may make it harder to effect a bail-in resolution on mid-sized banks that run into trouble.

Solid Profits for South African Banks Despite Political Upheaval

Operating profit increased by 8% and returns on equity, assets and risk-weighted assets all improved (mainly driven by lower loan impairment charges - down almost 10% yoy) despite political turbulence, sluggish economic growth and a sovereign downgrade to a sub-investment-grade rating (BB+). 

Dodd-Frank Easing May Be Long-Term Negative for US Banks

Congressional passage of financial reform legislation easing the Dodd-Frank Act for smaller and custodial banks is not likely to be a near-term ratings issue but could be negative for some banks' credit profiles over the long term, if it results in significantly reduced capital levels

US Banks Sustain Margin Expansion Unlike Past Fed Tightening Cycles

"Contrary to past tightening cycles, this time banks are experiencing margin expansion as asset yield betas (or, how much earning asset yields have increased relative to the Fed Funds target rate) have outpaced funding cost betas," said Bain Rumohr, Senior Director, Fitch Ratings. 

chart of the month

Spanish Banks' Loan Stock to Resume Modest Growth in 2018

The latest developments in the Spanish banking sector suggest that banks' stock of domestic private-sector loans is likely to start rising in 2018 for the first time since 2010.

Rising US Dollar Will Test EM Vulnerabilities Across Sectors

EM issuers are facing more challenging economic and financial conditions as interest rates rise and central bank monetary policy becomes less accommodative. Access more research on our Interest Rates Credit Hotspot.

Special Report: APAC Banks

US Fed Hikes should be Manageable for Asia-Pacific Banks

Gradual, well-signalled US monetary tightening over the next few years should be manageable for most Asia-Pacific banks, but markets with higher dependence on foreign funding and external debt levels will be more vulnerable due to potentially higher market, credit and liquidity risks.

FT-Fitch Global Banking Conference Highlights

  • Joo-Yung Lee, Fitch, and Alison Rose, RBS, on funding for SMEs and the relationship between FinTech start-ups and the banks
  • Gilles Moëc, Bank of America Merrill Lynch, on risks involved with non-bank lenders
  • Alison Rose, RBS, on regulation and the restriction on big banks
  • Tracy Blackwell, Pension Corp, on long term lending of insurance companies vs the banks
  • Joo-Yung Lee on impact of banks post crisis

View Highlights

Milken Institute 2018 Global Conference

Milken Institute 2018 Global Conference - De-Risking Emerging Markets Investments

Jeremy Carter, Chief Credit Officer, joins panelists at the 2018 Milken Institute Global Conference to discuss the de-risking of emerging markets. ​

Rating Action

Fitch Upgrades Viability Ratings of Three Chinese State Banks; Affirms IDRs of Five

We have upgraded the Viability Ratings of China Construction Bank Corporation (CCB), Industrial and Commercial Bank of China Limited (ICBC) and Bank of China Limited (BOC) to 'bb+' from 'bb'. 

Milken Institute 2018 Global Conference

Financial Regulation: New Era, New Regulators

Joo-Yung Lee, Head of North American Financial Institutions, discusses the state of financial regulations 10 years after the crisis, at the Milken Institute 2018 Global Conference.

Cryptocurrency Derivatives to Test Clearinghouses, Banks

Centrally cleared cryptocurrency derivatives could be a real-world test of clearinghouses' margining and default procedures, particularly if derivative notional volumes increase and cryptocurrencies exhibit heightened price volatility.

China Links Weaken Hong Kong Banks' Operating Environment

Fitch Ratings has cut its assessment of the operating environment for Hong Kong's banks to 'a'/stable from 'a+'/negative due to the growing influence of the links between the territory and mainland China. Click to watch the Bloomberg interview and listen to the RTHK interview.

UK Challenger Banks Face Tough Competitive Environment

YBG's takeover approach for Virgin Money is a sign of the difficulties that UK challenger banks face to grow and diversify organically in a market dominated by a few large lenders. Smaller banks have not been able to break into the financially attractive current-account market meaningfully. Instead they have focussed on building online savings platforms. 

Slower Credit Growth to Pressure Top Australian Banks' Earnings

Fitch Ratings expects Australia's four major banks' earnings to come under pressure in the near term as credit growth, especially in the residential mortgage segment, is slowing and non-interest revenue is likely to remain stagnant or decrease. 

Related: Major Aussie Banks Positioned to Withstand Housing Risks


Kevin Duignan


Kevin Duignan

Analytical Group Head

+1 212 908 0630

Jose Santos


Jose Santos

Business Group Head

+34 93 323 9044

Erwin van Lümich


Erwin van Lümich


+34 93 323 8403

Jonathan Cornish


Jonathan Cornish


+852 2263 9901

Sing Chan Ng


Sing Chan Ng


+65 6796 7210

James Longsdon


James Longsdon


+44 20 3530 1076

Marina Paoletti

EMEA - Developed Markets

Marina Paoletti


+39 02 879087 236

Alejandro Garcia


Alejandro Garcia


+1 (212) 908 9137

Diego Alcazar


Diego Alcazar


+1 212 908-0396

Joo-Yung Lee


Joo-Yung Lee


+1 212 908 0560

John Bareiss


John Bareiss


+1 312 368 3162