The uncertain macroeconomic environment along with negative shifts in customer risks, profitability, credit demand, and the availability of funds weighed on sentiment over the past six months, while increased market competition impacted sentiment positively.
Looking ahead, banks see an improvement in the macroeconomic environment and a pickup in demand for credit in the coming six months.
he ratio of banks indicating a decline in demand for retail and corporate credit over the past six months fell to one-third from around half in the previous survey, and a relative majority expect demand to pick up in both segments in the coming six months.
The survey shows net 31% of banks believed the economic environment contributed negatively to economic segment, down from 41% in the previous survey.
Around 11% of banks said it was harder to access long-term funds for lending, while 16% said it was difficult to get short-term funds. One-fifth expect a deterioration in the availability of long- and short-term funds in the coming six months.
One-third of lenders said the creditworthiness of both retail and corporate borrowers had deteriorated. Looking ahead, around half of banks expect a deterioration in creditworthiness and portfolio quality.
Around 80% of banks expect an increase in operating costs in the coming six months.
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