Fitch expects weak financial performance for US banks in 2023

By Ovunc Kutlu

ISTANBUL (AA) - Fitch Ratings said Tuesday it expects weak financial performance for American banks in 2023 and the US banking system is in turmoil amid sudden collapses of several banks.

The global rating agency said most banks have started this year with strong profitability, asset quality, regulatory capital and liquidity, which provide them to weather near-term challenges.

Performance, however, will depend on their "business model, asset concentration and diversity and stability of deposit funding," it said in a statement.

Fitch noted that it has taken a number of negative rating actions on banks that are most affected by the recent bank failures and significant deposit outflows since March.

Silicon Valley Bank (SVB), Signature Bank and First Republic Bank failed in the last two months due to liquidity issues and sudden deposit outflows.