BRIC banks to face pressure over 1 - 2 years: S&P
25 Jul 2012
Banks in the world's largest developing economies of Brazil, Russia, India, and China (BRIC) could come under pressure over the next 12-24 months, says a new report from ratings agency Standard and Poor's Ratings Services.
However, the ratings firm expects the BRIC banks' ties with the government to underpin their credit profiles. That's according to a report, titled " Government Support Should Enable BRIC Banks To Ward Off Economic Headwinds," published today.
The report, titled " Government Support Should Enable BRIC Banks To Ward Off Economic Headwinds," published today, says that a slowdown in growth in China, Brazil, and particularly India could weaken the asset quality and earnings of banks in these countries.
The situation in Russia is somewhat different. Russia's banking industry is likely to continue its recovery from a severe recession in 2008-2009 for at least the next two years.
Nevertheless, S&P's rating outlook on the large banks in Brazil, Russia, and China is stable, reflecting its expectation that these countries will maintain their good economic resilience to a global slowdown and that their banking sectors will experience only a moderate deterioration in asset quality and earnings.
The negative outlook on the banks in India - BBB-/Negative/A-3 - reflects the negative outlook on the sovereign rating.