JAKARTA – Emerging Market Credit growth (developing countries) in Asia, except Mongolia and Vietnam, have been shown to approach the development of China’s economy. Even some financial indicators are in the highest level.
Rating agency Fitch said in the report, some of the financial system at or near its highest level in history. However, the relatively rapid growth raises fears of a bubble in the macro-prudential risk indicators (MPI) in three countries, namely Mongolia, Sri Lanka and Indonesia.
According to Fitch, in general, most of the banking system will be at a good level, in the face of an increasingly difficult environment. With the shock absorbing capacity of profitability and capitalization and funding structure.
Meanwhile in Indonesia, Fitch assess tighter liquidity, especially in foreign currency, and lower capitalization has been a consequence of the current credit growth is more rapid and robust economic growth.
“Real credit growth and asset price increases triggered MPI indicators moved 3rd December 2011. However, raised concerns about the pace of economic growth, especially with the potential volatility of the economic downturn right now,”
Fitch expects non-performing loans (nonperforming load / NPL) is run into trend upward growth trend, from lows throughout their history. In addition, the credit absorption capacity will also be higher, with a stable income and a healthy capital. On the other hand, Nett interest margin (NIM), is one of the highest in Asia, despite strong but still under pressure, interest margins due to increasing competition.
As for growth in Asia is believed to be increasingly correlated with China. So any negative development of the market, could have an impact on the performance of banks across Asia. However, compared with their international counterparts, many Asian banking systems, especially in South Asia, is in good shape to withstand the turbulent economy.