Indian banking sector fundamentally stronger than China's - for now

Standard & Poor''s explains why Indian banks are fundamentally stronger credits than their counterparts in China despite weaker ratings.

Executive Summary

The Indian banking sector's credit quality, pre-provisioning profitability, and capitalization fundamentals are stronger than those of its Chinese counterpart, despite the credit ratings on the leading Chinese banks being higher than those on the Indian banks. The ratings differential reflects the readiness of the Chinese government to provide substantial resources through capital injections, and the sale of the banks' nonperforming assets to government-owned asset-management companiesfactors that boost the Chinese banks' standing but do...

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