The asset quality and capitalisation of India's banking sector is likely to remain under pressure in the next 12 months because of tepid domestic industrial activity
Most banking stocks were trading in red on Wednesday after Standard & Poor’s said asset quality and capitalisation of banks are likely to remain under pressure in the next 12 months.
Banking majors such as HDFC Bank, ICIC Bank and State Bank of India were trading down by 0.99 per cent, 0.66 per cent and 0.30 per cent, respectively, in the afternoon trade (at 1.16 pm). The BSE Bankex was trading 0.58 per cent down at 18,047.68.
On the other hand, YES Bank, IndusInd Bank and Fereral Bank were trading up by 1.40 per cent, 0.39 per cent and 0.10 per cent, respectively. READ MORE
“The asset quality and capitalisation of India’s banking sector is likely to remain under pressure in the next 12 months because of tepid domestic industrial activity, and subdued profitability and high leverage in some corporate sectors,” S&P said in its report- Indian Banks Face An Uphill Road This Year.
S&P credit analyst Amit Pandey said, “The non-performing loans of banks with high exposure to troubled sectors will continue to rise, and credit costs of banks with a backlog of provisions will increase.”
(With inputs from PTI)