India’s Leading BFSI Companies 2020

XIV Global banking scenario The ongoing implementation of international regulatory reforms is building up capital and liquidity buffers. Among emerging market economies (EMEs), profitability of banks has been dented by weak loan growth and high delinquencies. Global economy started losing its shine from the start of 2018 mainly due to an environment vitiated by factors like escalation in trade tensions, elevated financial vulnerabilities, geo-political risks and associated policy uncertainties. Because of which, Bank lending to the non-financial sector has moderated since the latter half of 2018 across advanced and emerging market economies. Although banks and financial institutions remained well capitalized, their profitability remains muted. The current global GDP growth slowdown is more intense in advanced economies as structural weakness, natural disasters and country specific risks infuriated the growing slack. With growth slowdown that began in 2018, credit growth, has slowed down across major economies, which, in turn, has adversely affected bank profitability. Despite distinct improvement in asset quality, structural weaknesses remain in the banking systems in various economies across the world, although capital position has been strengthened. World GDP growth rate Source: IMF, World Economic Database Credit to non-financial sectors (Emerging economies) 40000 44000 48000 52000 56000 60000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018 2019 Source: Bank for International Settlement Banking Overview Dun & Bradstreet