New Delhi: While Indian banks will get more concerned about asset quality with the growing slowdown in industrial activity, a diversification of their loan portfolio will save them from any significant damage, international credit agency Fitch Ratings said.
"Indian banks have experienced asset quality problems over the past 12-18 months in certain specific segments...the slowdown in industrial activity... which may be further exacerbated during 2009, raises more serious asset quality concerns for Indian banks in future," Fitch Senior Director Ambreesh Srivastava said in a conference call. The corporate sector's profitability has already been impacted by shrinking operating margins and some have also been hit due to mark-to-market losses on derivative transactions, Srivastava said. "Most Indian banks, thanks to their generally diversified loan portfolio are expected to absorb the effects of the downturn during the next 12 months without significant damage and large-scale rating downgrades are not foreseen at the moment," he said. The overall diversity of the banks loan portfolio should help contain the asset quality deterioration, and Fitch believes that the real gross non performing loan ratio in 2009 is unlikely to be significantly above 5 per cent (2.3 per cent at September 2008). Despite slowdown, loan growth for the banking system has remained high. However, some tempering of loan growth is expected as banks turn cautious in 2009, although it would still likely be 15-20 per cent, Srivastava said. http://www.financialexpress.com/news/banks-may-get-more-asset-concerned-fitch/413558/ ekamber --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
