Loan growth has started picking up, but outlook remains weak: UBS

In an interview with CNBC-TV18, Vishal Goyal, Head of Banks Research at UBS Securities India shared his reading of the market and his outlook. He was speaking from the side-lines of their conference.

According to him, visibility is improving on non-performing loans (NPL) cycle and it would improve even further after the adoption of International Financial Reporting Standards (IFRS).

Demand side is weak on loan growth. “We are seeing single digit growth. So loan growth outlook right now is weak and companies, banks etc everybody is expecting next 12-18 months to improve in terms of loan demand,” he said.

Speaking on recapitalisation, he said that it would partly bridge the NPL provision gap and it would be concentrated more to the efficient and larger banks.

Recapitalisation helps larger banks to clean up their balance sheet faster, he added.

For full interview, watch accompanying video...