Coronavirus crisis to hit Indian, Chinese, Indonesian banks hard, says S&P

Global rating agency Standard and Poor’s (S&P) has said the Covid-19 crisis will hit the Indian, Chinese, and Indonesian banking systems the hardest in the Asia Pacific region. Non-performing assets could rise by $600 billion and credit by $300 billion in 2020 in the region, it said.
 

The credit cost, amounts set aside for bad and stressed loans, for the Indian banking system will rise to 2.8 per cent in 2020-21, from the previous estimate of 1.5 per cent, S&P said in a statement. The pandemic will hit the demand and supply sides of the economy via domestic and external channels.
 

It said if the slowdown is accompanied by mass unemployment, it may hurt the personal loan book of banks, which now form around 7 per cent of the total loan book.