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 not necessarily add to their fundamental strength.

The two banking systems share certain attributes, such as operating in high-economic-growth environments although China's growth historically has been the faster of the two...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222