Moody’s has revised its outlook for Global Investment Banks to stable from positive.
The change in outlook is being driven by two main factors. Revenues will be pressured by lower client activity levels driven by slower global economic growth, together with lower interest rates and a flatter or inverted yield curve. With greater revenue headwinds will make positive operating leverage more elusive.
Ana Arsov, a Moody’s Managing Director said, “The stable outlook for the global investment banks reflects our expectations that profitability for the GIBs may have peaked for this economic cycle.
“Greater revenue headwinds will make further profitability gains more elusive, despite a continued focus on business reengineering and technology investments to boost efficiency.”