Fitch: Brighter outlook for APAC banks, risks remain

The US-based ratings agency, Fitch Ratings said in its latest report published on Thursday, “Fitch Ratings' outlook for bank performance in Asia-Pacific (APAC) is decidedly less negative than at the start of 2017, with the improved economic backdrop likely to support loan demand and asset quality.“

Key Points:

“The benign environment has the potential to mask weakening lending standards in markets where credit is growing particularly strongly, but any fallout is unlikely to be significant in 2018. 

APAC is generally benefitting from the global upturn in trade and growth. Many of Asia's emerging markets have ambitious infrastructure development plans that should boost employment and domestic demand, while fiscal policy is turning more expansionary in some developed markets.

We expect profitability to remain relatively stable in this benign environment, supported by sound lending growth, fee-income diversity and a drop in asset-quality pressures, particularly from the resources sector following the stabilization of commodity prices.”