Bank credit growth may rise in the current fiscal, ICRA has saidMumbai: The outlook for banks is expected to be stable amid improvement in credit growth of 8.9-10.2 per cent and decline in provisions in the current fiscal, rating agency ICA Ratings said on Tuesday.Gross Non-Performing Advances (GNPAs) of banks are expected to decline to 5.6-5.7 per cent by March, 2023 as against an estimate of 6.2-6.3 per cent by March, 2022.”ICRA Ratings expects outlook for banks to be stable in FY23, based on continued improvement in earnings driven by improved credit growth of 8.9-10.2 per cent in FY23 (8.3 per cent for FY22 (expected) and 5.5 per cent in FY21) and decline in credit provisions,” the agency said in a report on Tuesday.Credit growth would come from non-food segment borrowing which continues to be driven by retail and MSME segments, and partially by co-lending arrangements with non-banking finance companies (NBFCs), it said. In the wholesale credit segment, growth will be supported by demand shift from debt capital market to bank credit in a rising yield scenario as was seen in FY19.The agency expects treasury income to decline materially during FY23 in a rising bond yield scenario.”In terms of asset quality, the gross non-performing advances are expected to decline to 5.6-5.7 per cent by March, 2023 as against estimate of 6.2-6.3 per cent by March, 2022 while the net non-performing advances will decline to 1.7-1.8 per cent as against estimate of 2 per cent by March 2022,” the agency’s vice president Anil Gupta said.Credit and other provisions are estimated to decline to 1.3-1.4 per cent of advances in FY23 as against estimated 1.7-1.8 per cent in FY22.
Source link
Strange India 