Scope assigned new ratings to 78 instruments on 49 structured finance transactions in 2024, raising rated new-issue volume by 7.2%. On monitoring activity, heavy downgrades in Q1 pushed the 12-month ratings drift below neutral despite a strong Q4.

European non-financial companies face a broadly balanced credit outlook in 2025. Sturdy company finances stand in contrast to a challenging external environment of geopolitical and trade tensions, uneven growth and higher-for-longer interest rates.

Austria’s fiscal-consolidation plan presented to the European Commission should lower the budget deficit to close to 3% of GDP in 2025, although execution risks remain. Sustainable longer-term fiscal consolidation depends on pension and welfare reform.

MPS’s hostile all-share bid for Mediobanca to form Italy's third-largest financial institution faces high execution risk due to differing business models and challenges in achieving sustainable synergies.

The planned asset-management joint venture between BPCE and Generali supports BPCE’s strategic focus on business diversification, strengthening its franchise, growing its revenue base and addressing its profitability gap relative to other French peers.

European banks’ solvency profiles are generally robust. Strong profitability and RWA optimisation have supported capital positions and facilitated higher dividend payouts and share buybacks.

Banks are well positioned to weather a potential deterioration in the credit cycle. Scope’s bank ratings and issuer outlooks are largely stable, reflecting balanced upside and downside risks.

Scope’s mandated ratings of European companies continues to grow with the addition of HORNBACH to its coverage.

The consolidated non-performing loan (NPL) ratio of EU banks remained low in Q3 2024 but marginally rose quarter on quarter from 1.86% to 1.88%, according to most recent EBA data. Banks added EUR 2.7bn of new NPLs, bringing the total stock to EUR 376bn.

Management changes, strikes and shrinking profits late in 2024 show how severely a mixture of cyclical and structural challenges is unsettling Europe’s auto sector.