...Revenues Revenues will decline by mid-single digits due to lower net interest income (NII) as net interest margins compress amid lower interest rates. Anticipated loan growth and higher fee income will not offset the decline in NII. Expenses Expenses will likely increase modestly on the back of further investments in banks' business and technology, with inflation now under control. Banks will continue reporting superior efficiency, with the system's cost-to-income ratio slightly above 40%. Profitability We forecast the banking industry's domestic return on common equity will be about 12% in 2025, below the close to 14% levels over 2023-2024. Credit quality While some problem loans could emerge, we anticipate asset quality will remain resilient, given the supportive economic environment and borrowers' manageable debt levels. We forecast credit losses will stand at 50 basis points (bps) in 2025, in line with those of 2024. Capital Capital will likely consolidate at current levels, supported...
