Moody’s ups U.K. banking system to stable

Moody's Investors Service said it changed the outlook on the United Kingdom’s banking system to stable from negative.

This reflects the expectation that most U.K. banks will maintain solid financial fundamentals over the next 12 to 18 months, resulting from a favorable operating environment.

According to the agency, healthy economic growth in the U.K. will have a positive effect on banks' operating conditions. As noted in Moody's U.K. Credit Opinion published on May 26, the agency expects U.K. GDP growth of 2.7% in 2015 and 2.4% in 2016.

"We expect most banks' balance sheets to improve in 2015, with enhancements in their capital and leverage metrics as lenders position themselves for more stringent regulatory requirements," Moody’s senior analyst Carlos Suarez Duarte said in a news release.

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