Higher interest rates drive banks’ net interest margins. But uncertainty around how persistent inflation will be and how quickly rates will rise is clouding the outlook for lending recovery into next year that investors had hoped for.
An aggressive response would raise loan servicing costs, raising the potential for defaults. Banks would increase bad loan provisions, which would lead to weaker profit growth.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more: