The last year has highlighted weak and eroding profitability for many banks around the world. Even in emerging markets, profitability has been squeezed as global economic growth has weakened. Profit trends may strengthen in 2017 — particularly for US banks, which are positioned to benefit from higher interest rates and the recovery in consumer and business confidence that followed the US election. However, the sustainability of improved trends in the operating environment — and how transferable these improvements are to banks in other advanced economies and the emerging markets — remains uncertain.
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