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Bank Industry Risk Analysis: United Kingdom Nov 05
Standard & Poors, Nov 2005
Abstract
The U.K. banking system is one of the world's most creditworthy, in Standard & Poor's Ratings Services' view. The economic, regulatory, accounting, and legal frameworks are all supportive of a strong banking system, as are a high degree of industry concentration and limited public sector involvement. Although competition has increased, Standard & Poor's expects profitability to remain strong, and the declines in margins seen in recent years to moderate. Less favorable fundamentals--flat house prices, lower loan growth, and rising arrears--will challenge profit growth and underline the importance of cost control, but the U.K. banks seem well placed to manage the slowdown. Strategies are shifting. Large-scale in-market consolidation opportunities seem to have ended, and the highly indebted U.K. consumer appears to...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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