The banking industry is showing signs of recovery from a protracted correction, supported by commodity prices stimulating credit demand alongside asset quality improvement, APA-Economics reports citing S&P Global Ratings.
We assume moderate deterioration of NPLs to about 4%-5% in 2022, compared with 3.5% officially reported at mid-2022. Annual lending growth should continue in 2022, at about 15%. In our base case, credit costs will remain elevated in 2022 and beyond, reflecting lower real disposable income of households and small and midsize enterprises (SMEs) because of higher inflation.
We forecast credit losses in 2022-2023 will remain within 0.5%-1.0% of average loan books, still well below their historical cyclical level.
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