By Ovunc Kutlu
ISTANBUL (AA) - Large European banks are strongly positioned to weather an economic slowdown next year, Fitch Ratings said in a statement Thursday.
Most retail banking operations in Europe will continue to benefit from higher interest rates next year, the rating agency said.
High inflation, however, is expected to add cost pressures and reduce some of the benefits from rising rates, it added.
"We forecast only a mild deterioration in their impaired loans ratios in 2023, as a significant part of their lending consists of residential mortgage loans that have proven resilient over the cycle in many countries, while underwriting standards have been tightened after previous crises," the statement said.
The agency said the banks’ capitalizations are expected to remain healthy next year.