Are Good Old Days Over For The Largest Emerging Market Banks?

Asset quality deterioration, shortage of capital, and slowing credit growth could undermine the BRICMT (Brazil, Russia, India, China, Mexico, and Turkey) banks’ credit quality, especially amid economic slowdown following years of strong credit growth. In addition, there remain concerns about the rising household debt burden, given still low, although increasing, GDP per capita and cyclicality of these major emerging market economies. Furthermore, the following country-specific factors are pressuring the banks’ asset quality: increasing economic imbalances in Brazil due to a recently accelerating credit expansion by government-owned banks; rapid increase of high–risk unsecured lending in Russia; a highly leveraged corporate sector in India; lackluster export growth, debt-laden local governments, and many manufacturers suffering from oversupply in China; large homebuilders’ woes and deteriorating consumer lending in Mexico; and rapid credit card debt and consumer lending in Turkey.

Read full report on http://ccraprogram.wordpress.com/2013/10/12/are-good-old-days-over-for-the-largest-emerging-market-banks/

Regards
Biharilal Deora, CFA, FCAwww.linkedin.com/in/deora

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: