Banks prone to see capital decline for two years: Moody’s

New Delhi, November 30

Moody’s Investors Service on Monday said the bank capital would moderately fall in emerging Asia over the next two years, with India seeing larger capital decline without further infusion.

In a report, Moody’s said the uncertain trajectory of asset quality is one of the biggest threats for emerging market banks, as operating conditions remain challenging amid the current Covid pandemic.

The 2021 outlook for banks in emerging markets is negative, while the outlook for insurers is stable, it said.

It said non-performing loans (NPLs) will rise most for banks in India and Thailand because of the greater shock to their economies and historically poor performance of certain loan types. In India, stress among non-bank financial institutions will also curtail their capacity to lend, Moody’s noted. — PTI

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