Asian Banks: The Mid-Autumn Review

- India, China to Continue Robust GDP Growth into 2011 – "Our real GDP growth estimates for 2010 show stellar GDP growth for Singapore, mainly attributed to a rebound from a low base. However, on a sustained basis, China and India are expected to continue robust GDP growth well into 2011. Indonesia is also expected to maintain strong growth in the 6.1%-6.2% range."
- 2Q10 Loan and Deposit Growth Trends — "Loan growth at 2Q10 was moderate for Taiwan, Thailand, Singapore and Malaysia and strong for India, China, Indonesia and HK. Korea was the only market with low (~3%) loan growth YoY. Deposits growth was also strong (with the exceptions of HK, Thailand and Taiwan). However, loan growth surpassed deposit growth for all markets except Korea. Also, the loan / deposit ratio was <100% for all markets except Korea (116%)."
- Consumer Loans/GDP Lower Than Non-Consumer Loans / GDP — "Consumer loans as a % of nominal GDP lag the business loans / nominal GDP ratio for most markets (except Malaysia). Consumer loans as a % of GDP are lowest for Indonesia (8.4%), India (9.5%) and China (16.5%). However, a recent steep rise in household debt across Asia also hints at asset/property bubble formations."
- Policy Rate Trends Suggest Uptick — "With central banks pressing the brakes, monetary tightening across the region is expected to push up interest rates. So far, India (+100bps), Korea (+25bps), Taiwan (+12.5bps), Thailand (+25bps) and Malaysia (+75bps) have increased rates since Dec 2009. For the remainder of 2010, Citi’s macro team expects no hikes in China, Indonesia and Malaysia; 1 hike in TW (+12.5bps) and Korea (+25bps), 2 hikes in India (+50bps) and 3 hikes in Thailand (+75bps)."
- Credit Multiplier and Market Cap / GDP Studies – "India, Korea, Thailand and Singapore banks are close to the low end of their respective credit multiplier range (credit multiplier = loan growth / nominal GDP growth). HK and Malaysia are at the top ends of their similar range. However, low recent credit multipliers for some markets may also be attributed to a stellar 1H10 GDP rebound from a low base and hence may understate the actual credit multiplier. Banking sector size in equity value terms relative to local economy (i.e. banking sector market cap / GDP %) is low for India, Indonesia and Korea compared to others, highlighting possible scope for improvement in banking sector market caps over time."


No comments:

Post a Comment