KBRA Releases Research – 2020 U.S. Banking Outlook: Resilient Despite Headwinds

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases its 2020 U.S. Banking Outlook, which is viewed as stable heading into the new year. The outlook considers the sector’s historically high level of profitability, which is likely to prove relatively durable (albeit in a somewhat diminished state) as well as the fact that risky asset concentrations remain comparatively low relative to prior growth periods. The report also examines market undercurrents, with particular focus on the risk/reward dynamics of an increasing nonbank funding (shadow banking) presence. Finally, KBRA notes some existing and persistent headwinds for the banking industry going into the new year.

The main takeaways from the report include:

  • KBRA’s view of the current banking landscape, with a focus on what is driving bank ratings, namely dynamics in loan quality. In addition, the report presents a shock scenario matrix to provide a better understanding of the impact of a significant economic downturn, in the event 2020 becomes the year that the credit cycle rolls over.
  • An overview of business durability and vitality within the industry, including balance sheet growth potential, operating leverage, and competitive dynamics.
  • An outline of profitability trends and their associated drivers, as well as insight into the potential drivers of M&A activity into 2020.

To access the report, click here.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical Contacts:
M. Scott Durant, Director
(301) 969-3248
sdurant@kbra.com

Ashley Phillips, Director
(301) 969-3185
aphillips@kbra.com

Joe Scott, Managing Director
(646) 731-2438
jscott@kbra.com

Van Hesser, Senior Managing Director
(646) 731-2305
vhesser@kbra.com

Business Development Contact:
Dave DeMilt
(646) 731-3335
ddemilt@kbra.com

Contacts

Analytical Contacts:
M. Scott Durant, Director
(301) 969-3248
sdurant@kbra.com

Ashley Phillips, Director
(301) 969-3185
aphillips@kbra.com

Joe Scott, Managing Director
(646) 731-2438
jscott@kbra.com

Van Hesser, Senior Managing Director
(646) 731-2305
vhesser@kbra.com

Business Development Contact:
Dave DeMilt
(646) 731-3335
ddemilt@kbra.com