The country’s slow growth and investment outlook will reduce demand for mortgages, a key growth driver for its retail banks.

Being put on the FATF greylist means domestic lenders may struggle to maintain correspondent banking relationships and access external finance. 

Banks have not made substantial improvements since the FCA’s remarks in July.

Banks in the region are raising less debt amid uncertainties about interest rates and the growth outlook.

In 2022, banks’ performance in Latin America and the Caribbean had a boost from rising interest rates and economic growth.

The strong dollar has dampened the growth of Islamic banking services in Asia-Pacific, while Saudi Arabia continues to see large expansion. 

The future government will face three major economic challenges: a marked slowdown in growth, a deterioration in budget deficit and an increase in credit risk.

Like other challenger banks, Metro Bank has struggled with profitability over the past few years. But unlike others, it also reported a drastic drop in Tier 1 capital. 

The sector was described as stable by the IMF in September, but the ongoing conflict with Israel is set to change the outlook.

The mergers and acquisitions environment has been suppressed by inflation and rising interest rates so far.