Moody's: European Bank Margins May Continue to Fall Even If Interest Rates Rise
London, 12 December 2016-- Interest rates may do little on their own to alter existing trends in banks' net interest margins, given the weak past relationships between the two, Moody's Investors Service said in a report published today. While low interest rates are commonly cited as a source of the sector's weak profitability, Moody's analysis shows that the link between banks' net interest margins and rates has been limited in magnitude, although still statistically significant.
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