1、This report does not constitute a rating actionGlobal Bank Outlook 2023Greater Divergence AheadNovember 17,2022Contents2Key Takeaways3BICRAs,Ratings,And Outlooks 4What Are We Watching In 2023?7Higher-For-Longer Inflation Will Weigh On Economies8Hybrids AT1:To Call Or Not To Call?9Climate Risk:Banks

2、Are Making Progress10Future Of Banking:Crypto And DeFi12Emerging Markets:Clouds Are Gathering13North America14Europe20Asia-Pacific29Latin America36Related Research41Analytical Contacts423Key Takeaways The darkened economic outlook presents headwinds for banks asset quality,business volumes,and finan

3、cing conditions.Positively,earnings greatly benefit from the monetary policy tightening.Rating trends across the global banking sector will be tested in 2023.Our banks net outlook ratio is likely to deteriorate from a 6%positive.The likelihood of economic recession in Europe and the U.S.has increase

4、d;inflation is at multi-decade highs in many countries;and the spillover from the Russia-Ukraine war continues.Strong bank balance sheets should buffer headwinds,with solid capitalization and sound asset quality.We anticipate increasing credit divergence.Deterioration will be more acute for emerging

5、 market banks,nonbank financial institutions,and entities in countries most exposed to energy restrictions.Private and public sector sensitivities increase.Private and public sector sensitivities increase.Property sector challenges intensify.Property sector challenges intensify.Digitalization,ESG,an

6、d cyber to challenge Digitalization,ESG,and cyber to challenge banks business models and risk management.banks business models and risk management.Our economic base case does not hold.Our economic base case does not hold.A material downside emerges-including a full-blown recession with a sharp rise