Moody's upgrades UK banking outlook to stable

Ratings agency Moody’s has upgraded its outlook for the UK banking system to stable from negative, despite the continued expectation of low medium-term economic growth.

It cites a number of factors including:

  • The UK's increasingly stable economic outlook despite its low growth prospects
  • The consequent improvement in the outlook for asset quality
  • Continuing improvements in capital ratios driven in part by more stringent capital requirements
  • An expectation that improvements in funding and liquidity metrics will be maintained over the outlook period
  • Improving profitability and efficiency ratios due to lower impairments