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.

Banks in the region are more exposed as they use fewer interest rates derivatives, while net interest income is larger than in other regions as a percentage of total revenue.

Monetary policy in the region is decoupling from the US Federal Reserve. Next year will be key to assess whether the region’s central banks have graduated to countercyclical policy and can provide a lesson for the world. 

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

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.

The region has seen a number of financing structure innovations, but more needs to be done to make a real sustainable impact.