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Fitch: EM Banks Under Pressure, But Deterioration Should be Contained
November 3, 2015 / 9:23 AM / 2 years ago

Fitch: EM Banks Under Pressure, But Deterioration Should be Contained

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: What Investors Want to Know: Emerging-Market Banks here MOSCOW/LONDON, November 03 (Fitch) In a new report, Fitch Ratings says that slower GDP growth, maturing loan books, currency depreciation and capital outflows are pressuring the credit profiles of emerging market (EM) banks. However, the agency does not expect a broad EM crisis, either in banking systems or in general. The extent of credit deterioration, and of resulting negative rating actions, is likely to be contained due to banks' significant loss-absorption capacity, positive economic growth in most EMs and available sovereign support. These opinions were presented by the heads of Fitch's financial institutions coverage for Asia Pacific, Latin America and emerging Europe in recent meetings with more than 30 leading EM investors across seven US cities. Some of the main questions and our responses to them are covered in the report, which also features questions on banks in the Middle East and Africa, to cover all major markets in the EM universe. The greatest focus at the meetings was on prospects for banks in China (the extent of potential asset quality problems as the economy slows), Brazil (exposure to the recession, Petrobras and the weaker real) and Turkey (asset quality and refinancing risks following depreciation of the lira). The report presents a high-level summary of our views on these and other key issues affecting EM banks. It is available at www.fitchratings.com or by clicking the link above. Contact: James Watson, CFA (Emerging Europe) Managing Director +7 495 956 9901 Fitch Ratings CIS Ltd 26 Valovaya Street Moscow, 115054 Mark Young (APAC) Managing Director +65 6796 7229 Alejandro Garcia (Latin America) Managing Director +52 81 8399 9100 Eric Dupont (Middle East and Africa) Senior Director +33 1 44 29 91 31 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com; Brian Bertsch, New York, Tel: +1 212-908-0549, Email: brian.bertsch@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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