Bank Credit Growth May Touch 10% In Current Fiscal, Says ICRA

Bank credit growth may pick up in the current fiscal, says ICRA


Rating agency ICA Ratings on Tuesday said the outlook for banks is expected to remain stable amid improving credit growth to 8.9-10.2 per cent in the current fiscal and a fall in provisions.

Gross Non-Performing Advances (GNPAs) of banks are expected to decline to 5.6-5.7 per cent by March, 2023, as against the estimates of 6.2-6.3 per cent by March, 2022.

“ICRA Ratings expects the outlook for banks to remain stable in FY13, with better credit growth of 8.9-10.2 per cent in FY13 (8.3 per cent (expected) for FY12 and 5.5 per cent in FY2011). Based on continued improvement in earnings. in credit provisions,” the agency said in a report on Tuesday.

Credit growth will come from non-food segment lending driven by retail and MSME sectors, and partly by co-lending arrangements with non-banking finance companies (NBFCs). In the wholesale credit segment, growth will be supported by a shift in demand for bank credit from the debt capital market, as seen in FY19.

The agency expects Treasury earnings to fall sharply during FY13 in a rising bond yield scenario.

“In terms of asset quality, gross non-performing advances are expected to decline to 5.6-5.7 per cent by March, 2023 as against 6.2-6.3 per cent by March, 2022, while net non-performing advances will decline 1.7-1.8 per cent as against the estimate of 2 per cent by March 2022,” said Anil Gupta, vice-chairman of the agency.

Loans and other provisions are expected to decline by 1.3-1.4 per cent in advances in FY12 as compared to 1.7-1.8 per cent estimated in FY12.


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