The outlook for British banks has brightened according to a leading credit rating agency, with lenders now in a better position to cope with the run-up to Brexit.
Standard and Poor’s said last night it has revised the negative outlook on several large UK banks “mostly to stable, and in some specific cases to positive,” following new analysis on the sector.
The report said: “We see the industry as now better positioned to deal with uncertainties – and potential turbulence – in the run-up to the UK’s exit from the EU in March 2019.”
It said banks “are showing increased resilience”, reflected in stronger underlying profits, the successful disposal of non-core assets, and larger capital buffers.
S&P said Brexit talks “remain difficult and protracted… with the attendant downside risks in the case of a disorderly outcome.”
However, it added: “An orderly Brexit with a transitional arrangement is still our base case.”
Manfred Weber, a leading politician in Brussels, said: “After my meetings here in London my main message is I am more optimistic, there is progress … That is the most important thing because the perspective from a European point of view towards London was in the last weeks not so clear.”
A Downing Street spokesperson said Weber and May had discussed the need for a transition period, partly to ensure “the stability of the financial sector across Europe.”