Research Note
UK bank net interest margins bottomed out by the first half of 2024 as the Bank of England prepared to cut Bank Rate
Lloyds' banking net interest margin fell to 2.93% in the second quarter of 2024, then rose to 2.97% by the fourth; NatWest and Barclays UK margins also rose through 2024 while the Bank of England cut Bank Rate from August.
Itaú and Banco do Brasil grew 2024 profits as Nubank overtook Itaú in customer count
Itaú's recurring result rose 18.2% to R$41.4bn in 2024 and Banco do Brasil's adjusted profit 6.6% to R$37.9bn, while central bank data for the fourth quarter showed Nubank's 100.8m customers overtaking Itaú's 98.5m.
The 2025 global banking outlook: five themes that will define the year ahead
Global growth of 3.3% is projected for 2025, the median FOMC projection for the federal funds rate at end-2025 has risen to 3.9%, and the UK has moved Basel 3.1 to 1 January 2027: five themes for banks across rates, margins, credit, capital rules and resilience.
Egypt's banking sector absorbed a 600-basis-point rate shock in March 2024 — the NPL impact has been contained so far
Egypt raised its key policy rates by 600bp in March 2024, taking the overnight deposit rate to 27.25%. By the end of September 2024 the banking system's NPL ratio had fallen to 2.4%, with provision coverage of 87.4% and a capital adequacy ratio of 19.1%.
Islamic banking assets reached $2.37 trillion in 2023, growing 7.21%
Islamic banking assets rose 7.21% to USD 2.37 trillion in 2023, 70.21% of a USD 3.38 trillion Islamic finance industry. Islamic banks in the GCC grew around 8.40%, while MENA outside the GCC only kept pace with conventional peers.
Basel IV output floor is set to increase capital requirements at Europe's largest banks, with G-SIIs facing a 12.2% rise
Full EU implementation of Basel III would lift G-SIIs' Tier 1 minimum required capital by 12.2% by 2033, against 7.8% for all banks, the EBA estimates. The output floor alone adds 8.6% for G-SIIs, but most of it arrives only after 2030.
South Africa's major banks reported rising NPLs in retail unsecured lending as household finances deteriorated in H1 2024
FirstRand's retail unsecured NPLs rose 22% to R15,256m in the year to June 2024, and Nedbank's personal loan stage 3 ratio reached 27.1%, even as Nedbank's credit loss ratio on that book fell to 8.08% from 11.06%.
US and Canadian bank capital ratios remained well above minimum requirements in mid-2024 despite Basel III endgame uncertainty
Canada's six largest banks reported CET1 ratios of 12.8% to 13.5% at 31 July 2024 against an 11.5% expectation, and four US G-SIBs already exceeded the requirements taking effect on 1 October 2024, as the Fed's supervision chief outlined plans to re-propose the Basel III endgame.
Vietnam's bank credit grew 6% in H1 2024 as real estate stress lingered
Credit to Vietnam's economy rose 6% in the first half of 2024 and 13.5% year on year, short of the State Bank's 15% target, while NPLs to developers and home buyers reached an estimated 2.73% of all loans in 2023.
Indonesia's big four banks earned Rp93.8 trillion in H1 2024 as BRI, BCA and Mandiri led profits
BRI, BCA, Bank Mandiri and BNI earned Rp93.8 trillion for shareholders in H1 2024, up 5.2%. BCA delivered 57% of the gain while interest expense rose 35-43% at the other three lenders and system margins narrowed.
Saudi sovereign supply and UAE bank deals shape sukuk markets in the first half of 2024
Saudi Arabia's monthly riyal sukuk raised SAR 36.2bn in January to June 2024, alongside a USD 5bn international sukuk drawing about USD 20bn of orders; UAE banks priced USD sustainability sukuk at 95-100bp over Treasuries.
European bank net interest margins widened again in Q1 2024 and are now expected to compress as the ECB cuts rates
Net interest margins at ECB-supervised banks rose to 1.62% in Q1 2024 and the EBA's EU/EEA measure reached 1.69%, yet the ECB's June rate cut, falling spreads and bank surveys point to margin compression in the quarters ahead.