Banks: Slower loan growth a worry

Asset quality concerns ease

WE EXPECT ANOTHER muted quarter for banks due to slower loan growth and a steady rise in loan-loss provisions. We are less worried about asset-quality metrics, except for lenders that have exposure to microfinance, where we see significantly higher credit costs. Non-banks under our coverage are expected to exhibit subdued loan growth, while we maintain a mixed outlook on asset quality despite stable collection trends.