Outlooks 2026: Global Banks

Executive Summary

Global Bank Outlook 2026 – Stable as economic growth, lower rates support asset quality

Our 2026 global outlook for banks is stable, which reflects our expectation that creditworthiness will remain strong across the sector. Steady but subdued global growth and lower policy rates will underpin benign asset quality conditions, despite geopolitical risks, while profitability is likely to remain solid. Although lower rates will squeeze some banks' net interest margins (NIMs), higher fee and commission income will offset this. Strong sector capitalisation will support credit growth and shareholder distributions, while banks will continue to invest as private credit, AI and digital assets reshape the sector.

Key takeaways:

• Steady but subdued global economic growth will provide a broadly stable operating environment. Economic growth in many regions will be supported by lower policy rates. However, the operating environment will remain susceptible to geopolitical risk, trade tensions and a rapidly changing financial landscape.

• Lower policy rates will support asset quality. As central banks in many regions cut rates further, asset quality will remain resilient at this late stage of the business cycle. Loan performance will benefit from lower debt-servicing costs.

• Capital ratios have likely reached peak levels. Improved profitability in recent years has boosted capital buffers, while contained loan growth in 2026 will help sustain strong capital ratios. Regulators, led by the US, are likely to reduce "gold plating" of Basel rules and local regulations, reducing capital requirements.

• Profitability will be broadly stable. Lower rates will squeeze NIMs, especially for banks reliant on deposit funding and floating-rate lending, although some banks have macro hedges. Higher fees and commissions and deposit repricing will also be an offset.

• Banks are likely to maintain solid liquidity buffers. Deposits will continue to recover as competition from higher-yielding securities abates, reducing banks' reliance on wholesale funding in some systems.

• Governments' willingness to support banks will remain unchanged. However, a weakening of fiscal capacity will somewhat constrain governments' abilities to provide support for banks in some systems.

• What could change the outlook. Strong growth in major economies and an easing of geopolitical conflicts and trade tensions could result in the outlook changing to positive. A deterioration in global economic conditions, an escalation of geopolitical conflicts or heightened policy uncertainty could lead to a negative outlook.

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