Contact Your Financial Adviser Money Making MC
9
January 2017
Global
credit rating agency Moody's on Monday said asset deterioration is a challenge
for Indian banks over the medium-term. The
Total Investment & Insurance Solutions
Moody's
Investor's Service and its Indian affiliate ICRA Ltd said in a statement the
prospect for Indian banks were subdued. The
Total Investment & Insurance Solutions
"Asset
quality will remain a negative driver of the credit profiles of most rated
Indian banks and the stock of impaired loans. Non-performing loans (NPLs) and
standard restructured loans will still rise during the horizon of our
outlook," Moody's Vice President and Senior Analyst Alka Anbarasu said. The Total Investment & Insurance Solutions
"We
expect the pace of deterioration in asset quality over the next 12-18 months
should be lower than what was seen over the last five years, and especially
compared to FY2016, even as we consider those remaining problem loans which
have not been recognised as such in several large accounts," Anbarasu
added. The Total Investment & Insurance
Solutions
According
to Moody's, Indian banks would increase their focus on resolving some of the
large problem loan accounts. The Total
Investment & Insurance Solutions
Anbarasu
said there will be increased pace of debt restructuring under various schemes
designed by Reserve Bank of India (RBI). But the weak reserving and pressure on
profitability would limit bank's ability to go for bad loan account resolution
under RBI schemes.
From
ICRA's viewpoint, a muted level of credit off-take -- on the back of weak
demand, increasing competition and greater disintermediation -- will continue
to exert downward pressure on lending rates. The Total Investment & Insurance Solutions
"Such
a development will be partly offset by the fall in the cost of funds, but
stubbornly high operating expense levels and elevated credit costs will
continue to dent profitability matrices for the banks," said Karthik
Srinivasan, an ICRA Senior Vice President.The
Total Investment & Insurance Solutions
No comments:
Post a Comment