Fitch Ratings said in a report on Wednesday that the performance of major banks in the United Kingdom is expected to remain "sound" over the next two years due to their "strong franchises, higher interest rates, and only-moderate asset quality deterioration."
Fitch estimated the banks will be "only slightly" affected by the effects of monetary tightening on the British economy. "Profitability should remain strong, despite our expectations for net interest margins to contract, reflecting higher interest rates, structural hedge income, manageable loan impairment charges and controlled cost growth," the rating agency said.
