(MENAFN) Moody's stated that it sustained its negative outlook for Germany's banks due to rising stress, insufficient profits and growing risk for the banking industry, reported Xinhua News.
The ratings agency said that over the 12-18 month outlook period, fierce competition and low interest rates are resulting in margin pressure that will probably lessen the banks' already sluggish revenues and profits.
Furthermore, waning operating environment amid recessionary trends in Europe, increasing risk charges and worsening asset quality, in addition to the restricted loss-absorption capacity of many banks were other factors that contributed to the agency's negative outlook.
Moody's said that several German banks were exposed to a deteriorating sovereign debt crisis in Europe and to macroeconomic stress.
It is worth noting that the German gross domestic product (GDP) is expected to expand between 1 and 2 percent next year, according to Moody's.
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