Covid-19: Indian banking system to be among the last to recover, says S&P

Path to recovery will be more painful and banks' recovery to long-term averages for key asset quality and profitability ratios will take years, it added

Hit by economic slump due to Covid-19, the banking systems in emerging markets like India, Mexico, and South Africa will be slower to recover to 2019 levels and it will happen only beyond 2023, according to rating agency Standard and Poor’s (S&P).

The Indian banking sector is considered a late-exiter. Its recovery will be longer. But some ratios may return more quickly to levels as they were weak prior to the onset of Covid-19 (in contrast with many other jurisdictions).

There were significant asset-quality issues in India prior to the onset of Covid-19, while asset quality was on an improving