FINANCIAL INSTITUTIONSSECTOR IN-DEPTH 3 March 2016TABLE OF CONTENTS Bank Market-Implied Ratings Mostly Steady in February, but Energy Weighs on Some Banks1Market-implied ratings tables for global banking regions and companies 6 Monthly Bank Risk Report: key CDS credit metrics7Monthly Bank Risk Report: key bond credit metrics 11 Appendix: Moodys Capital Markets Research - recent publications on finance sector19ContactsAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research,Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products.For further detail, please see the last page.Bank Risk ReportBank Market-Implied Ratings Mostly Steady in February, but Energy Exposures Weigh on Some Banks Bank credit spreads in the CDS and bond markets generally worsened in the last month, but in most cases the deterioration was in line with the broad market. Contagion from the energy sector has influenced bank credit spreads and market-implied ratings for several months. For the latter the month of February was somewhat less negative. No regions average bank CDS-implied rating worsened in February. Average bank bond-implied ratings improved in two regions, worsened by one notch in two regions, and were unchanged in two regions.We expect that, if oil prices remain low, bank market-implied ratings around the world will show little improvement. Numerous uncertainties are maintaining negative pressure on bank credit spreads. These, and the risk of downside surprises in energy portfolios, overshadow a case for optimism about bank credit metrics globally at present.No banking region underperformed the broad market in February ; the majority of banking companies followed the broad market trend of spread widening. The regional average CDS-implied ratings on March 1 matched the levels on February 2. Around the globe the average regional CDS-implied ratings on March 1 were: North America at Baa1 (...
