E Amazings
  • Home
  • Automotive
  • Business
  • CBD
  • Crypto
  • Education
  • Entertainment
  • Fashion
  • Finance
  • Health
  • Home Improvement
  • Law \ Legal
  • News
  • Shopping
  • Sports
  • Technology
  • Travel

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

What's Hot

Hackaday Links: August 7, 2022

August 7, 2022

Despite Bear Market, 2022 Fundraisings Already Surpassed 2021: Messari

August 7, 2022

Build A Tablet Out Of Your Framework Motherboard

August 7, 2022
Facebook Twitter Instagram
E Amazings
  • Home
  • Automotive
  • Business
  • CBD
  • Crypto
  • Education
  • Entertainment
  • Fashion
  • Finance
  • Health
  • Home Improvement
  • Law \ Legal
  • News
  • Shopping
  • Sports
  • Technology
  • Travel
Facebook Twitter Instagram
E Amazings
You are at:Home»Business»Bad loan ratio of banks likely to fall to 5-5.5 pc by March 2024: S&P Global
Business

Bad loan ratio of banks likely to fall to 5-5.5 pc by March 2024: S&P Global

Paul EasterBy Paul EasterJuly 21, 2022No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter Pinterest WhatsApp Email


S&P Global Ratings on Thursday said non-performing loans of banks are expected to decline to 5-5.5 per cent of the total advances by March 2024.

As per the latest Financial Stability Report published by the RBI, the gross non-performing assets (GNPA) declined to a six-year low of 5.9 per cent in March 2022.

“We project the banking sector’s weak loans will decline to 5-5.5 per cent of gross loans by March 31, 2024. Likewise, we forecast the credit costs to stabilise at 1.5 per cent for fiscal 2023 and further normalise to 1.3 per cent, making credit costs comparable to those of other emerging markets and India’s 15-year average,” the rating agency said in a report.

The small and midsize enterprise sector and low-income households are vulnerable to rising interest rates and high inflation, but it expects these risks to be limited, the agency added.

With an economic pick-up, residual stress for these segments should start abating, it said, adding that NPL recoveries are likely to also gain momentum.

It also said India’s economic growth prospects should remain strong over the medium term, with GDP expanding 6.5-7 per cent annually in fiscal years 2024-2026.

The economy’s long-term higher growth rate versus peers highlights its historical resilience. India’s wide range of structural trends, including healthy demographics and competitive unit labour costs, work in its favour, it noted.

Additionally, it said, the government is likely to remain supportive of the system and there is a very high likelihood the government will continue to support public-sector banks, notwithstanding plans to privatise two such banks.

In the next few years, the report said, loan growth to stay somewhat in line with the trajectory of nominal GDP, and loan growth to the retail sector to continue to outperform the corporate sector.

Corporate borrowing is also picking up momentum, with both working-capital needs and capital expenditure-related growth driving demand, it said.

Still, if risk management does not improve, the coming growth cycle could produce a new crop of sour loans, the agency added.

Lower credit costs and a pick-up in loan growth should sustain the turnaround in banks’ earnings, it said.

Improving profitability should augment capital formation. Capitalisation has increased in the past few years due to banks’ capital-raising and the government’s capital infusions into public-sector banks, it noted.

Capital ratios are comparable to those of international peers for India’s large private-sector banks, though they are lower for public-sector banks, S&P Global added.





Source link

Paul Easter

Related Posts

India poised to achieve $5 trillion economy dream through ‘Atmanirbhar Bharat’ strategy, says expert

By Paul EasterAugust 7, 2022

Sister’s Day 2022: Date, Significance, WhatsApp message, greetings

By Paul EasterAugust 7, 2022

Q1 results: IOC, HPCL, BPCL post Rs 18,480 cr loss in quarter 1 on holding petrol, diesel prices

By Paul EasterAugust 7, 2022

Commonwealth Games 2022: Indian women’s hockey team wins bronze

By Paul EasterAugust 7, 2022
Add A Comment

Comments are closed.

Our Picks

Hackaday Links: August 7, 2022

By Paul EasterAugust 7, 2022

Despite Bear Market, 2022 Fundraisings Already Surpassed 2021: Messari

By Paul EasterAugust 7, 2022

Build A Tablet Out Of Your Framework Motherboard

By Paul EasterAugust 7, 2022
Recent Posts
  • Hackaday Links: August 7, 2022 August 7, 2022
  • Despite Bear Market, 2022 Fundraisings Already Surpassed 2021: Messari August 7, 2022
  • Build A Tablet Out Of Your Framework Motherboard August 7, 2022
  • Users in Web3 Will Do a lot More Than Just Trade Crypto: Cronos’ Ken Timsit (Interview) August 7, 2022
  • India poised to achieve $5 trillion economy dream through ‘Atmanirbhar Bharat’ strategy, says expert August 7, 2022
  • Sister’s Day 2022: Date, Significance, WhatsApp message, greetings August 7, 2022
  • Homemade CAT Scan Shouldn’t Scan Cats August 7, 2022
Archives
  • August 2022
  • July 2022
  • June 2022
Facebook Twitter Instagram Pinterest TikTok
  • Home
© 2022 E Amazings - All Rights Reserved.

Type above and press Enter to search. Press Esc to cancel.