Em banking datawatch end 2015 by siva

Banks Global

EM Banking System Datawatch Economic Risks Ease; Moderate Pressure on Bank Credit Profiles Remains Special Report Economic Risks Ease: Fitch Ratings expects economic growth in emerging markets (EMs) to recover moderately to 4.1% in 2016 and accelerate to 4.9% in 2017 after a low of 3.8% in 2015. Near-term downside risks for EMs have eased in recent months as a result of the stabilisation of growth in China, the commodity price recovery and a weaker dollar. We expect continued strong economic performance in India, and for Russia and Brazil to exit recession in 2017. Moderate Negative Rating Pressure: EM banks’ credit profiles remain under moderate pressure, notwithstanding the easing of downside risks, due to slower-than-historical GDP growth, maturing loan books, lower commodity prices, weaker currencies and greater political risks. These factors, combined with Negative Outlooks on sovereign ratings, drive Negative Outlooks on most banks in Russia, Brazil and Saudi Arabia; 25% of EM banks were on Negative Outlook at end-1Q16, up from 22% at end-2015 mainly due to actions in EMEA. Related Research Foreign Currency Debt: Rising Risks to Emerging Market Sovereigns (April 2016) Macro-Prudential Risk Monitor (May 2016) Global Economic Outlook (May 2016) Asia-Pacific Banks Regulatory Compendium (April 2016) China Bank Compendium Report (March 2016) India Financial Institutions Compendium (March 2016) Dollarisation in CIS/Georgian Banking Sectors (June 2016) Russian Banks Datawatch 1Q16 (May 2016) Russian Banking Sector: Surviving the Crisis (April 2016) Turkish Banks’ External Debt: End-2015 Update – Foreign Borrowing Slows; Structural Vulnerabilities Remain (June 2016) Financial Institutions 2016 Outlooks Compendium

Buffers, Support Largely Intact: Fitch still expects negative rating actions to be moderate in scope. This reflects banks’ significant loss-absorption capacity, still positive economic growth in most EMs and available sovereign support. Discussions on senior creditor bail-in are gaining traction in some EMs (most notably Russia), but Fitch expects support, in particular for stateowned banks, to remain in place across most EMs for the foreseeable future. Russia Stabilising: Russian banks continue to recognise problem loans and capital at some is tight, but downside risks have fallen as the economy starts to bottom out. Liquidity remains comfortable, margins are slowly recovering and regulatory forbearance is being rolled back. Turkish banks’ performance remains sound, supported by solid economic growth, although NPLs will likely continue to tick up as portfolios season. Banks’ foreign borrowing has slowed as a narrower current account deficit has reduced Turkey’s financing requirements. Pressures, Support in China: Slower economic growth in China is adding to pressure on banks’ asset quality. NPL ratios, although rising, remain low due to regulatory forbearance and various support measures, while credit/GDP continues to creep up to unsustainable levels. Elsewhere in EM Asia, the mostly negative Sector Outlooks for 2016 reflect expected pressures from slower growth in China, lower commodity prices and weaker currencies. But banks’ profitability and capital buffers should in most cases help to offset these effects.

Analysts James Watson, CFA (Emerging Europe) +7 495 956 6657 james.watson@fitchratings.com Mark Young (APAC) +65 6796 7229 mark.young@fitchratings.com Alejandro Garcia (Latin America) +52 81 8399 9100 alejandro.garcia@fitchratings.com Eric Dupont (Middle East and Africa) +33 1 4429 9131 eric.dupont@fitchratings.com

Research Konstantin Alekseenko +7 495 956 9901 konstantin.alekseenko@fitchratings.com

www.fitchratings.com

Indian Banks’ Capital Needs: Regulatory driven efforts to deal with legacy asset-quality issues are driving up reported NPLs and credit costs, adding to pressures on capital. In particular, public-sector lenders will find it challenging to generate internally, or raise from the market, the capital they need to ensure full Basel III implementation by 2019. Brazil Weakening; LatAm Stable: Credit costs are rapidly trending upward in Brazil, with state-owned and smaller private-sector banks particularly badly hit and some already posting operating losses. Elsewhere in Latin America, Fitch expects the mild economic slowdown to moderately affect asset-quality and profitability metrics, but slower loan growth should support capital adequacy and funding profiles. Slower Growth in GCC: In Gulf Cooperation Council (GCC) countries, lending growth has weakened since 2015 due to reduced government spending and tighter liquidity has resulted in higher funding costs, which banks have started to pass on to borrowers. Most ratings remain driven by potential sovereign support and some have been downgraded as sovereigns’ ability to provide support has diminished with lower oil revenues.

17 June 2016

Banks Loan Growth, Penetration and Currency Structure

 China continued to report significant, albeit slowing, loan growth from a high base, a more recent acceleration of non-loan facilities adds to broader credit expansion.  Reductions in Hungary and Slovenia were due to deleveraging and portfolio cleaning.

Loan Growth in 2015 CIS/GEO

(%) 112

CEE

ME/Africa

30 20 10 0 -10

End-2015 data except ISR (end-9M15) Source: National banks and bank regulators, Fitch calculations and estimates

Loans/GDP Ratiosª and Sovereign Ratings CIS/GEO

(%)

CEE

ME/Africa

LatAm

ZAF

TUR BGR BHR BRA IND SLV CRI PHL RUS COL BLR EGY LKA GEO AZE URY IDN KAZ NIC ROM GTM ARG NGA

UKR

VEN

25 0

CCC

B-

B+

BB-

BB+

CHN TWN

MYS

PAN

 Higher loans/GDP ratios in GCC countries are due to the impact of lower oil price on nominal GDP.

Asia

150

100

 Leverage is high and continues to rise in China.

LatAm

125

 Credit levels remain moderate across most EMs, mitigating risks of recent rapid expansion in some markets.

Asia

VEN ARG EGY GEO NIC LKA BLR TUR URY PER AZE COL MEX CHN GTM PHL UAE CHL QAT CRI ZAF PAN IDN KAZ SAU BHR SVK HND OMN RUS MYS KOR POL BRA THA CZE SLV ISR ROM TWN NGA KWT UKR BGR ARM IND SVN HUN

 Very rapid real loan growth has ceased to be a feature in most EMs: most markets reporting more than/close to 20% nominal expansion in 2015 were driven primarily by inflation (Venezuela, Argentina) or depreciation (Georgia, Belarus, Turkey, Uruguay).

CHL

ISR

THA SVN POL

CZE SVK

QAT UAE

KOR

KWT OMN SAU

HND

PER MEX

BBB- BBB BBB+

A-

A+

AA-

Sovereign ratings indicated are Long-term foreign currency IDRs ª End-2015 loans/2015 GDP except ISR (end-9M15 loans/2015 GDP) Source: National banks and bank regulators, Fitch calculations and estimates

Change in Loans/GDP, End-2015 vs. End-2014

 Leverage fell in Ukraine because of inflation impact on GDP.

(%) 40

 Combination of GDP growth and loan contraction drove lower ratios in Hungary, Slovenia, Armenia and Bulgaria.

CIS/GEO

CEE

ME/Africa

Asia

LatAm

30 10 0 -10 QAT UAE KWT OMN SAU CHN BHR AZE BLR GEO CHL ZAF NIC COL LKA PER TUR PHL SVK CRI EGY KOR POL GTM MEX KAZ URY SLV HND VEN ISR BRA ROM MYS ARG NGA IND PAN TWN IDN RUS CZE THA BGR ARM SVN HUN UKR

-20

End-2015 loans/end-2015 GDP compared to end-2014 loans/end-2014 GDP except ISR (end-9M15 loans/end-2015 GDP compared to end-2014 loans/end-2014 GDP Source: National banks and bank regulators, Fitch calculations and estimates

CEE

ME/Africa

Asia

LatAm

80 60 40 20 0 SVK

SVN

CHN

TWN

MYS

ZAF

PHL

KOR

IDN

MEX

CZE

LKA

CHL

POL

QAT

TUR

EGY

RUS

HND

PER

HUN

KAZ

GTM

ROM

AZE

BGR

BLR

URY

-20 UKR

 Level of FX lending is a material risk in Nicaragua and Uruguay.

CIS/GEO

100

GEO

 Depreciation has been manageable in CEE (against the euro) and Peru.

(%)

ARM

 Depreciation against the Swiss franc has increased focus on possible FX mortgage solutions in Poland.

Foreign-Currency Loans/Total Loans, Depreciation in 2014-2015

NIC

 Currency weakness in 2014-2015 and high FX lending has contributed to pressure on asset quality across the CIS region.

End-2015 FX loan ratio for all markets. Dots indicate USD/local currency rate change from end-2013 to end-2015, except BGR, CZE, HUN and ROM (change vs EUR) and POL (vs. CHF) Source: National banks and bank regulators, Bloomberg, Fitch calculations and estimates

Related Criteria Global Bank Rating Criteria (March 2015)

EM Banking System Datawatch June 2016

Banks Loan Impairment and Coverage

 In Brazil, asset-quality metrics have been supported by loan restructuring.  Further sharp increase in NPLs in Ukraine driven by recession and currency depreciation; the same factors also caused (much smaller) NPL increases in Russia and other CIS countries.  Higher NPL ratio in Bulgaria the result of adoption of EBA definition; in India NPLs are rising and yet to peak due to regulatory-driven cleanup of legacy exposures.  Further large reduction in Kazakh NPL ratio reflected regulatory pressure as banks removed legacy impaired loans from balance sheets (but sometimes only to related SPVs).

CIS/GEO

(%) 40

CEE

ME/Africa

Asia

LatAm

30 20 10 0

Impaired loan definitions differ across markets (see annex 3), and are not wholly comparable. End-2015 data except ISR (end9M15). AZE, UKR based on Fitch surveys of rated banks, rather then regulatory data. NGA based on banks which have reported Source: National banks and bank regulators, Fitch calculations and estimates.

Change in Impaired Loans Ratio, End-2015 vs. End-2014 (bpts) 610 400 300 200 100 0 - 100 - 200 - 300 -1,560

CIS/GEO

CEE

ME/Africa

Asia

LatAm

UKR BGR BLR IND RUS AZE ARM BRA URY NGA THA IDN TUR KOR ARG PER GTM CRI COL TWN MYS NIC CHN SLV HND ZAF PAN ISR VEN SAU CHL CZE PHL GEO SVK ROM POL MEX LKA SVN HUN KAZ

 Reported impaired loan ratios have generally remained low in Latin America and Asia, but picked up moderately in some markets in 2015 or are expected to do so as economies slow and loans season.

Impaired Loans

UKR BGR SVN ROM HUN AZE RUS KAZ ARM BLR POL IND CZE SVK ZAF BRA NGA LKA TUR THA GEO MEX URY IDN HND SLV PHL ARG COL PER ISR KOR CRI CHL MYS GTM CHN SAU NIC PAN VEN TWN

 Greatest asset quality problems are still in CIS and southern part of CEE.

End-2015 vs. end-2014 except ISR (end-9M15 vs. end-2014). AZE, UKR based on Fitch surveys of rated banks. NGA based on the banks which have reported Source: National banks and bank regulators, Fitch calculations and estimates

 Lower NPLs in Hungary were due to regulatory-driven settlement of retail loans and corporate work-outs; in Romania, this reflected continuation of regulatory-driven clean-up begun in 2014, and in Slovenia was driven by both write-offs/sales and recoveries.

 High coverage ratios in many Latin American markets are supported by quite conservative provisioning rules.  CIS coverage ratios are boosted by considerable loan restructuring in some markets.  Moderate coverage in some CEE markets partly reflects reasonable mortgage book collateralisation.

EM Banking System Datawatch June 2016

Reserve Coverage of Impaired Loans (%) 950 560 250 200 150 100 50 0

CIS/GEO

CEE

ME/Africa

Asia

LatAm

VEN TWN NIC CHN GEO COL PER BRA HND GTM MEX CHL KAZ URY THA PHL SLV IDN ARG CRI PAN UKR MYS RUS HUN SVN TUR ZAF SVK KOR BLR ISR LKA POL CZE BGR IND

 Reported Chinese bank NPL ratios helped by restructuring, loan sales, movement of problems off balance sheet and government support for borrowers.

Banks Performance

 Further increase in (nominal) net interest margin in Venezuela was due to higher inflation.  Margin improvement in Bulgaria driven by reduction in funding costs.  Margins collapsed in Russia due to higher funding costs after the end2014 rate rise (but slowly recovered during 2015 -1H16); in Ukraine also driven primarily by rate rise.  Lower margins in Argentina driven by policy rate cuts and tighter credit spreads; in Brazil, conversely, the cause was rate hikes, which resulted in higher funding costs.  Lower margins in Hungary were due to the new pricing regime for retail loans, policy rate reductions and shrinking loan volumes; in Armenia due to moderate pressure on both sides of balance sheet.  Very high cost of risk in Ukraine reflects sharp NPL growth and loan write-offs at failed banks.

EM Banking System Datawatch June 2016

LatAm

4 2 0

Data for 2015 except ISR (9M15, annualized). Margin calculated as net interest income divided by average earning assets (net loans, securities and interbank placements) except RUS (net interest income on loans/deposits divided by average loans) Source: National banks and bank regulators, Fitch calculations and estimates

Net Interest Margin Change in 2015 (bpts) 214

CIS/GEO

CEE

ME/Africa

Asia

LatAm

50 0 - 50 - 100 - 150 - 200

Net interest margin change in 2015 vs. 2014, except IND (9MFY16 (Apr-Dec 2015) vs. FY15 (Apr 2014-Mar 2015)) and ISR (9M15 vs. 2014). Source: National banks and bank regulators, Fitch calculations and estimates

Loan Impairment Charge/Average Gross Loans CIS/GEO

(%) 11

CEE

ME/Africa

Asia

LatAm

5 4

 Russian sector was close to breakeven due to tighter margins and higher provisions.

Asia

 High impairment charges in Russia and neighbouring markets, but still somewhat understated due to banks’ flexibility in problem loan recognition.

UKR ARM BRA BLR RUS MEX GEO PER VEN KAZ COL SLV BGR HND ARG CRI TUR CHL IND NIC THA ZAF URY POL SVN KOR LKA CZE SVK PAN PHL MYS ISR TWN HUN

Data for end-2015 except ISR (9M15, annualized) Source: National banks and bank regulators, Fitch calculations and estimates

Return on Average Assets CIS/GEO

(%)

CEE

ME/Africa

Asia

LatAm

4 3 2 1 0 -1 -5.2 VEN ARG GEO NIC PER COL IDN GTM PAN HND MEX NGA LKA BRA CZE CHN TUR PHL THA CHL ZAF URY KAZ SLV BGR MYS BLR SVK CRI POL TWN ISR IND SVN RUS KOR HUN ARM UKR

 Ukraine banks’ large losses driven by loan write-offs; in Armenia negative result due to margin compression and higher impairment charges.

ME/Africa

 Lower profitability levels in Asian markets are due to narrower margins and holdings of lower-yielding bonds.

CEE

 Cost of risk has ticked up in Brazil on weaker economy, but high margins mean sector remains profitable.

 Solid profitability continued in most of Latin America, in particular Colombia and Peru (but in Venezuela and Argentina largely due to inflation).

CIS/GEO

(%)

VEN NIC ARG HND PER LKA GEO MEX KAZ IDN COL GTM CRI URY ARM TUR PHL UKR BGR CHL BLR BRA RUS ZAF IND SVK THA HUN PAN CHN POL ISR CZE MYS SVN KOR TWN

 Spreads are notably lower in much of Asia and CEE, reflecting tough competition, low rates and (in Asia) relationship lending.

Net Interest Margin

VEN BGR COL LKA IDN TUR GEO TWN THA PAN CZE ISR MYS CHN SVN MEX ZAF PHL HND POL SVK PER KAZ BLR KOR CHL GTM IND URY CRI NIC HUN ARM BRA ARG UKR RUS

 Margins strong in most of LatAm, reflecting significant high-yielding consumer lending in many markets and focus on deposit funding.

Data for end-2015 except ISR (9M15, annualized). For NGA based on the banks which have reported Source: National banks and bank regulators, Fitch calculations and estimates

Banks

 Solid capital ratios in Nigeria provide moderate buffer against risks from lower oil prices and depreciation.  North Asian markets and India are operating with relatively higher leverage and tighter capital ratios, often reflecting state ownership.  CEE banks are operating with average leverage metrics, but high capital ratios, mainly due to government bonds, mortgage books.  Moderate capital ratios in some Latin American markets, but these are generally backed by much stronger reserve coverage than in CEE.

Capitalisation Equity/Assets CIS/GEO

(%)

CEE

ME/Africa

Asia

LatAm

20 16 12 8 4 0

NGA ARM SAU GEO COL IDN BGR SLV UAE OMN KWT BLR PHL ARG QAT SVN CRI THA HND TUR SVK NIC POL KAZ MYS MEX PAN RUS PER CZE GTM HUN URY BHR KOR LKA CHN UKR CHL IND TWN ZAF VEN ISR BRA EGY

 Relatively high capital ratios reported in many GCC and CIS markets, although in CIS often supported by under-reporting (restructuring) of problem loans.

End-2015 data excep ISR (end-9M15) Source: National banks and bank regulators, Fitch calculations and estimates

Tier 1 Regulatory Capital/Risk-Weighted Assets CIS/GEO

CEE

ME/Africa

Asia

LatAm

(%) 25 20 15 10 5

 In Slovenia, ratio improved due to earnings retention and deleveraging, in Poland primarily as a result of retained earnings.  Sharp fall in Ukrainian sector capital ratio was due to sector losses; sector-wide waiver on normal capital ratios in place to end-2018.  Reduction in Georgia driven by Bank of Georgia’s deconsolidation of nonbanking assets; in Argentina the result of rapid growth in high-inflation environment.

BGR SVN IDN CZE ROM HUN UAE SVK SAU POL BLR PHL ARM THA MYS MEX URY TUR KAZ ARG BRA LKA ZAF KOR CHN EGY AZE GEO COL TWN GTM HND PER ISR IND CHL RUS UKR NIC

End-2015 data, except EGY, ISR and SAU (end-9M15) Source: National banks and bank regulators, Fitch calculations and estimates

Change in Tier 1 Ratio at End-2015 vs. End-2014 CIS/GEO

CEE

ME/Africa

Asia

100 0 -100 -200 -300 -427

End-2015 vs. end-2014 except EGY and ISR (end-9M15 vs. end-2014). For BHR, CRI, SLV, KWT, NGA, OMN, PAN, SAU, VEN data change in Equity/Assets ratio. Source: National banks and bank regulators, Fitch calculations and estimates

 Net NPLs are of moderate concern in Bulgaria due to high capital ratios.

Impaired Loans Less Loan Impairment Reserves/Equity

 Net NPLs have become significant in India due to more prudent recognition, and is likely to add to system capital pressures.

(%) 50 40 30 20 10 0 -10 -20 -30

EM Banking System Datawatch June 2016

CIS/GEO

CEE

ME/Africa

Asia

LatAm

BGR IND POL CZE BLR ZAF UKR LKA SVK SVN ISR KOR SAU TUR HUN RUS MYS PAN ARG CRI IDN PHL SLV GTM URY MEX THA CHL NIC HND TWN CHN COL BRA PER GEO KAZ VEN

 Negative net NPLs in Kazakhstan reflect under-reporting of problem exposures by some banks; in most LatAm markets and Georgia they are driven by generally conservative provisioning.

LatAm

(bps) 200

ROM BLR SVN POL NGA ARM IDN THA TWN HUN SAU CZE CHN BGR SVK IND UAE PHL COL BHR CRI ISR GTM KOR PAN SLV HND OMN MYS NIC VEN QAT KWT URY CHL ZAF KAZ EGY RUS BRA MEX TUR PER LKA ARG GEO UKR AZE

 Higher Tier 1 ratio in Belarus driven by injection into Belarusbank and reduction of FX loan risk weights; in Nigeria the ratio was supported mainly by retained earnings.

End-2015 data except ISR (end-9M15). Impaired loan definitions differ across markets (see annex 3), and are not wholly comparable. AZE, UKR based on impaired loan data from surveys of rated banks. NGA based on the banks which have reported Source: National banks and bank regulators, Fitch calculations and estimates

Banks

 Turkish banks have funded part of loan growth through market borrowings, but high LTD ratios in some CIS markets are more due to government/shareholder funding.  Most Asian, Latin American and GCC systems are primarily deposit funded.  Greater access to longer-term wholesale facilities in some more mature domestic markets (Korea and Chile) is reflected in higher LTD ratios (in Korea, this also reflects significant international borrowings).

Funding Gross Loans/Customer Funding CIS/GEO

(%)

CEE

ME/Africa

Asia

LatAm

175 150 125 100 75 50 25 0 BRA ARM UKR TUR AZE KOR CHL QAT COL GEO CRI BLR PER SLV RUS OMN POL KAZ THA HND MEX SVN UAE ZAF IDN SVK NIC LKA PAN HUN MYS ISR ROM SAU GTM KWT CZE IND BGR TWN URY CHN ARG BHR PHL NGA VEN EGY

 High loan-to-deposit (LTD) ratio in Brazil is mainly due to issuance of debt (“Letras Financieras”) to retail customers to lengthen tenors and use new regulations.

End-2015 data except ISR (end-9M15). For RUS, eurobonds excluded from deposits (included in regulatory data) Source: National banks and bank regulators, Fitch calculations and estimates

 Higher ratios in Costa Rica and UAE are due to moderate loan growth and close to flat deposits; increase in Colombia driven by still significant loan growth.  Sharp reduction in Azerbaijan LTD was driven by high dollarization of deposit base and large devaluations of manat.  Lower LTD in Kazakhstan primarily reflected loan write-offs (net loans to deposits were flat); reduction in Armenia was due both to loan contraction and deposit growth.

 There is significant dependence on foreign funding in some CEE and CIS countries, albeit in most cases largely from parent banks, rather than market facilities.

Foreign Funding/Total Liabilities

 Refinancing risks are significant for Turkish banks due to predominance of market funding in external debt and large share of short-term facilities.

CEE

ME/Africa

Asia

LatAm

50 40

20 10 VEN

CHN

ARG

MEX

ZAF

TWN

PHL

THA

MYS

KOR

KAZ

KWT

SVK

POL

RUS

CZE

SVN

OMN

BLR

HUN

CHL

TUR

UAE

UKR

QAT

GEO

PAN

ARM

0 BHR

 High ratio in Bahrain in part reflects wholesale/offshore nature of much of the system; in Panama, this is due to the system’s role as banking hub for the region.

CIS/GEO

(%)

End-2015 data Source: National banks and bank regulators, Fitch calculations and estimates

 Foreign funding at GCC banks includes flows within the region.  Asian and Latin American banks are predominantly funded domestically.

EM Banking System Datawatch June 2016

Banks Annex 1: Data Sources and Presentation Countries Fitch has published the EM Banking System Datawatch report semi-annually since 2010 to facilitate cross-market comparisons of key credit metrics in emerging-market banking sectors. The current report covers 48 markets, as listed below (the codes used in the charts are shown here in brackets). 

Asia (9): China (CHN), India (IND), Indonesia (IDN), Malaysia (MYS), Philippines (PHL), South Korea (KOR), Sri Lanka (LKA), Taiwan (TWN), Thailand (THA)



Central and Eastern Europe (CEE) (8): Bulgaria (BGR), Czech Republic (CZE), Hungary (HUN), Poland (POL), Romania (ROM), Slovakia (SVK), Slovenia (SVN), Turkey (TUR)



Commonwealth of Independent States and Georgia (CIS/GEO) (7): Armenia (ARM), Azerbaijan (AZE), Belarus (BLR), Georgia (GEO), Kazakhstan (KAZ), Russia (RUS), Ukraine (UKR)



Latin America (LatAm) (14): Argentina (ARG), Brazil (BRA), Chile (CHL), Colombia (COL), Costa Rica (CRI), El Salvador (SLV), Guatemala (GTM), Honduras (HND), Nicaragua (NIC), Mexico (MEX), Panama (PAN), Peru (PER), Venezuela (VEN), Uruguay (URY)



Middle East (ME)/Africa (10): Bahrain (BHR), Egypt (EGY), Israel (ISR), Kuwait (KWT), Nigeria (NGA), Oman (OMN), Qatar (QAT), Saudi Arabia (SAU), South Africa (ZAF), United Arab Emirates (UAE)

From 2013, Fitch has followed the IMF’s definition of emerging markets, in accordance with which the Czech Republic, Israel, Slovakia, Slovenia, South Korea and Taiwan are not classified as EMs. However, these markets continue to be included in this report to facilitate cross-country comparisons. The data for Bahrain includes only retail banks.

Sources Data have been sourced primarily from disclosures of national regulators, and through application of Fitch calculations to these. Where regulatory disclosure is insufficient, Fitch has sometimes derived sector ratios by calculating averages of those reported by rated banks. In such cases, the bank data has usually been taken from public disclosures; however, in Ukraine and Azerbaijan, management data reported to Fitch has been used to derive sector asset quality ratios. Where regulatory data are absent and reasonable estimates cannot be made, countries have been omitted from relevant charts. Of the 48 countries covered in this report, regulatory disclosures are most limited in China, Romania, Nigeria, some countries of the GCC and – since 2015 – Azerbaijan.

Dates All data in this report are as at end-2015, unless otherwise indicated. The financial year in India runs from April to March. In this report, regulatory data at end-2015 and Fitch estimates at end-2015 are used. Full-sector data for FY16 (end-March 2016) have not been published.

Annexes Detailed regulatory data and Fitch-calculated ratios and estimates (mostly, as of end-2015) are presented in Annex 2. Fitch estimates are indicated in the annexes in italics.

EM Banking System Datawatch June 2016

Banks Annex 2: Banking System Data (End-2015) Central and Eastern Europe (CEE) Bulgaria (BGNbn)

Czech Republic (CZKbn)

Hungary (HUFbn)

Poland (PLNbn)

87.5 48.0 54.1 35.8 18.3 27.5 5.7 48.4

5,469.7 220.3 2,782.9 1,461.0 1,321.9 519.7 94.5 2,688.4

32,885.5 114.7 14,771.7 8,848.1 5,923.6 4,688.5 1,609.2 13,162.5

1,595.6 409.0 1,107.2 482.7 624.5 270.9 43.2 1,064.0

69.3 24.9 44.4 29.6 11.5 10.1 11.0 49.4

3,520.7 1,454.1 2,066.6 862.9 527.6 410.4 420.9 2,286.8

16,984.4 9,494.4 7,490.0 5,997.4 2,984.9 2,604.6 3,087.8 15,661.1

1,106.7 443.4 663.3 251.7 173.7 146.2 159.1 975.1

2.8 4.2 2.1 2.1 1.1 0.9

110.9 177.0 81.7 95.4 14.5 66.9

870.3 908.9 708.2 200.7 11.8 (2.9)

35.4 57.1 34.5 22.6 9.0 11.5

102.9 63.6 55.3 33.8 50.7 20.4 51.5

121.8 62.0 49.2 47.5 18.7 5.8 58.8

97.6 43.8 40.0 40.1 31.7 11.7 92.8

89.3 62.0 66.7 56.4 24.5 6.5 59.6

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

81.4 78.1 91.2 64.1 n.a.

78.4 79.0 71.2 58.7 17.5

50.4 87.0 56.8 44.1 20.1

62.0 100.0 77.8 59.9 16.4

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

13.2 20.5 22.2

9.6 17.9 18.4

9.1 16.6 19.7

10.9 15.0 16.3

Ratios: Income statement (%) Net interest income/average earning assets Operating expenses/operating revenues Pre-impairment profit/average assets Loan-impairment charges/average loans Return on average assets Return on average equity

4.0 49.7 2.4 2.0 1.0 8.0

2.3 46.1 1.8 0.5 1.2 12.9

2.9 77.9 0.6 (0.2) (0.0) (0.1)

2.3 60.4 1.4 0.8 0.7 6.7

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

27 3.2 76.6 20.2 57.3

46 n.a. n.a. n.a. n.a.

n.a. 16.0 59.3 24.6 49.6

626 n.a. n.a. n.a. 48.4

Country Assets and loans Assets Assets (USDbn) Gross loans O/w non-retail O/w retail O/w foreign currency Loan impairment reserve Net loans Funding and capital Customer deposits O/w non-retail O/w retail Foreign funding Equity Tier 1 regulatory capital Total regulatory capital Risk-weighted assets Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income Ratios: Lending and asset quality (%) Assets/GDP Gross loans/GDP Net loans/assets Retail loans/gross loans Foreign currency loans/gross loans Impaired loans/gross loans Reserve coverage of impaired loans

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Central and Eastern Europe (CEE) (Cont.) Romania (RONbn)

Slovakia (EURbn)

Slovenia (EURbn)

Turkey (TRYbn)

n.a. n.a. 217.5 109.6 108.0 107.2 n.a. 217.5

67.4 73.3 46.2 20.2 25.9 0.7 1.6 44.6

36.2 39.4 22.8 14.4 8.4 0.8 3.1 19.7

2,357.5 809.3 1,532.5 1,130.4 402.1 472.1 35.5 1,497.0

253.5 106.7 146.8 n.a. 72.8 n.a. n.a. n.a.

50.9 19.8 31.1 6.5 7.5 5.2 5.6 31.5

24.0 9.3 14.7 6.1 4.3 3.9 4.1 19.6

1,245.4 n.a. n.a. 520.2 262.3 259.4 306.3 1,967.3

Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income

n.a. n.a. n.a. n.a. n.a. n.a.

1.9 2.2 1.2 1.0 0.2 0.6

0.7 1.1 0.7 0.4 0.3 0.1

77.3 106.1 53.8 52.3 20.7 26.1

Ratios: Lending and asset quality (%) Assets/GDP Gross loans/GDP Net loans/assets Retail loans/gross loans Foreign currency loans/gross loans Impaired loans/gross loans Reserve coverage of impaired loans

n.a. 31.5 n.a. 49.6 49.3 13.5 n.a.

86.4 59.2 66.2 56.1 1.6 4.9 70.2

93.9 59.3 54.5 36.8 3.4 15.2 90.2

119.8 77.9 63.5 26.2 30.8 3.1 74.6

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

36.8 85.8 n.a. 57.9 n.a.

65.2 90.7 85.0 61.1 10.9

62.4 95.0 75.5 61.4 19.1

63.3 123.1 59.4 n.a. 24.8

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

n.a. 16.7 19.2

11.1 16.5 17.7

12.0 20.1 20.8

11.1 13.2 15.6

n.a. n.a. n.a. n.a. n.a. n.a.

3.0 56.3 1.5 0.8 0.9 7.6

2.1 60.9 1.2 0.8 0.3 2.6

4.2 50.7 2.4 1.4 1.2 10.5

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

29 n.a. n.a. n.a. n.a.

13 n.a. n.a. n.a. 73.1

20 63.5 30.2 6.4 n.a.

50 n.a. n.a. n.a. n.a.

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Commonwealth of Independent States (CIS) and Georgia Country Assets and loans Assets Assets (USDbn) Gross loans O/w non-retail O/w retail O/w foreign currency Loan impairment reserve Net loans Funding and capital Customer deposits O/w non-retail O/w retail Foreign funding Equity Tier 1 regulatory capital Total regulatory capital Risk-weighted assets Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income Ratios: Lending and asset quality (%) Assets/GDP Gross loans/GDP Net loans/assets Retail loans/gross loans Foreign currency loans/gross loans Impaired loansa/gross loans Reserve coverage of impaired loansa Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

Armenia (AMDbn)

Azerbaijan (AZNbn)

Belarus (BYRbn)

Georgia (GELbn)

3,449.6 7.1 2,119.5 1,339.6 780.0 1,392.0 n.a. 2,119.5

34.9 22.4 20.8 12.9 7.9 10.7 n.a. n.a.

630,463.3 34.0 377,771.2 308,982.8 68,788.4 215,938.6 19,165.9 358,605.3

25.2 10.5 16.0 7.7 8.3 10.4 1.0 15.0

1,501.8 495.9 1,006.0 965.8 506.6 409.2 474.5 2,933.3

17.1 7.6 9.5 8.2 n.a. 2.8 3.6 24.9

355,276.0 162,555.6 192,720.4 119,401.7 80,015.2 61,675.8 78,626.2 419,563.5

14.3 7.5 6.9 6.4 3.5 2.7 4.3 24.5

115.2 208.6 117.0 91.6 104.3 -20.6

n.a. n.a. n.a. n.a. n.a. n.a.

17,704.3 36,066.4 17,985.9 18,080.5 13,303.5 5,188.8

1.3 2.5 1.5 1.0 0.4 0.5

67.2 41.3 61.4 36.8 65.7 7.8 n.a.

64.2 38.2 n.a. 37.8 51.5 9.5 n.a.

75.0 44.9 56.9 18.2 57.2 7.3 69.3

79.4 50.5 59.6 51.7 64.7 2.8 230.4

29.2 141.1 51.0 67.0 34.0

31.5 121.4 n.a. 55.4 n.a.

42.3 106.3 64.5 54.2 21.7

45.3 111.6 66.3 47.9 29.5

14.7 14.0 16.2

n.a. 11.1 14.4

12.7 14.7 18.7

14.0 11.0 17.5

4.6

n.a.

3.7

6.3

56.1 2.7 4.8 -0.6 -4.2

n.a. n.a. n.a. n.a. n.a.

49.9 3.3 3.5 0.9 7.2

59.2 4.5 2.7 2.3 15.1

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

21 n.a. n.a. n.a. 52.6

n.a. n.a. n.a. n.a. n.a.

26 64.1 31.1 3.1 78.2

19 n.a. n.a. n.a. 77.8

Azerbaijan impaired loans based on survey of rated banks; coverage ratio based on survey NPLs and reserves Azerbaijan has not published sector income statement data since January 2015 Source: National banks and bank regulators, Fitch calculations and estimates. Estimates indicated in italics. All data at end-2015

EM Banking System Datawatch June 2016

Banks Commonwealth of Independent States (CIS) (Cont.) Kazakhstan (KZTbn)

Russia (RUBbn)

Ukraine (UAHbn)

23,780.3 69.9 15,553.7 11,390.1 4,163.6 7,152.6 1,647.8 13,905.9

77,593.3 1,064.6 48,544.5 37,860.2 10,684.3 14,979.7 3,786.5 44,758.0

1,252.6 52.2 1,024.9 847.1 177.8 587.0 311.0 713.9

15,605.1 8,719.6 6,885.5 2,070.2 2,490.1 2,516.8 3,057.6 19,230.2

46,909.1 23,690.0 23,219.1 7,773.7 7,551.7 6,002.5 9,008.6 70,914.5

760.3 360.5 399.8 307.8 94.9 87.5 129.8 1,054.8

862.1 1,054.1 408.0 646.1 330.2 222.6

1,621.4 3,197.3 1,239.9 1,957.4 1,716.6 192.6

39.0 84.2 36.7 47.5 114.5 (66.6)

60.1 39.3 63.6 26.8 46.0 8.0 133.2

96.5 60.4 57.7 22.0 30.9 8.3 94.0

63.3 51.8 57.0 17.3 57.3 31.2 97.3

Ratios: Funding (%) Customer deposits/GDPb Gross loans/customer depositsb Customer deposits/liabilitiesb Retail/total customer depositsb Foreign funding/total liabilities

39.4 99.7 73.3 44.1 9.7

58.3 103.5 67.0 49.5 11.1

38.4 134.8 65.7 52.6 26.6

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

10.5 13.1 15.9

9.7 8.5 12.7

7.6 8.3 12.3

Ratios: Income statement (%) Net interest income/average earning assets Operating expenses/operating revenuesc Pre-impairment profit/average assetsc Loan-impairment charges/average loans Return on average assets Return on average equity

6.2 38.7 3.1 2.2 1.1 9.2

3.2 38.8 2.6 3.7 0.3 2.7

4.1 43.6 3.7 9.1 (5.2) (54.8)

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

35 2.0 24.2 73.8 59.2

733 59.2 8.2 32.7 57.8

113 27.4 34.8 37.8 53.6

Country Assets and loans Assets Assets (USDbn) Gross loans O/w non-retail O/w retail O/w foreign currency Loan impairment reserve Net loans Funding and capital Customer depositsb O/w non-retailb O/w retailb Foreign funding Equity Tier 1 regulatory capital Total regulatory capital Risk-weighted assets Income statement Net interest income Total operating revenues Operating expensesc Pre-impairment operating profitc Impairment charges Net income Ratios: Lending and asset quality (%) Assets/GDP Gross loans/GDP Net loans/assetsa Retail loans/gross loans Foreign currency loans/gross loans Impaired loans/gross loans Reserve coverage of impaired loans

For Kazakhstan, accrued interest is added to reported net loans to calculate the net loans/assets ratio For Russia, Eurobonds have been excluded from customer deposits (included in regulatory data) to derive deposit numbers and ratios reported here c For Russia, an estimated tax charge has been backed out of operating expenses (included in regulatory data) to derive opex and pre-impairment profit numbers and ratios Source: National banks and bank regulators, Fitch calculations and estimates. Estimates indicated in italics. All data at end-2015 b

EM Banking System Datawatch June 2016

Banks Asia Country Assets and loans Assets Assets (USDbn) Gross loans O/w non-retail O/w retail O/w foreign currency Loan impairment reserve Net loans

China (RMBbn)

India (INRbn)

Indonesia (IDRtrn)

199,345.4 30,702.1 99,346.0 72,314.7 27,031.3 5,392.0 3,010.2 96,335.8

n.a. n.a. n.a. n.a. n.a. n.a. 2,063.0 70,170.0

6,132.6 444.6 4,057.9 2,952.1 1,105.8 n.a. 110.2 3,947.7

Funding and capital Customer deposits O/w non-retail O/w retail Foreign funding Equity Tier 1 regulatory capital Total regulatory capital Risk-weighted assets

139,775.2 84,582.3 55,192.9 1,297.8 15,205.3 11,010.9 13,103.0 97,398.2

91,846.5 n.a. n.a. n.a. n.a. n.a. n.a. n.a.

4,413.1 n.a. n.a. n.a. 811.4 812.6 914.7 4,276.6

n.a. n.a. n.a. n.a. n.a. 2,293.7

n.a. n.a. n.a. n.a. n.a. n.a.

308.4 519.3 386.1 133.2 n.a. 104.6

Ratios: Lending and asset quality (%) Assets/GDP Gross loans/GDP Net loans/assetsa Retail loans/gross loans Foreign currency loans/gross loans Impaired loans/gross loans Reserve coverage of impaired loans

294.6 146.8 48.3 27.2 5.4 1.3 236.2

n.a. 53.2 n.a. n.a. n.a. 6.2 46.3

53.1 35.2 64.4 27.2 15.6 2.5 109.1

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

206.6 71.1 75.9 39.5 0.7

67.7 78.6 n.a. n.a. n.a.

38.2 92.0 82.9 n.a. n.a.

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

7.6 11.3 13.5

7.5 9.6 n.a.

13.2 19.0 21.4

2.5 28.1 2.2 n.a. 1.2 16.7

3.1 49.1 1.9 1.2 0.5 n.a.

5.9 74.4 2.3 n.a. 1.8 13.6

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

n.a. n.a. n.a. n.a. n.a.

118 37.7 7.7 54.6 49.3

Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income

All data at end-2015. For India, the financial year runs from 1 April to 31 March. Loan and deposit numbers shown here are as at end-December 2015. Ratios are Fitch estimates and limited regulatory disclosures for 9MFY16 (ending on 31 December 2015) a Gross loans/assets for Indonesia as net loan number is not available Source: National banks and bank regulators, Fitch calculations and estimates. Estimates indicated in italics

EM Banking System Datawatch June 2016

Banks Asia (Cont.) Malaysia (MYRbn)

Philippines (PHPbn)

South Korea (KRWtrn)

2,355.7 547.5 1,445.1 624.2 820.9 80.6 22.2 1,422.9

12,089.1 258.0 5,958.1 4,897.3 1,060.9 571.3 161.6 5,796.5

2,163.9 1,845.5 1,602.5 1,040.4 562.1 183.1 20.8 1,581.7

1,671.1 1,059.0 612.1 164.8 246.4 209.3 244.7 1,516.0

9,231.3 n.a. n.a. 821.0 1,506.7 n.a. n.a. n.a.

1,321.4 n.a. n.a. 73.3 175.0 161.8 198.1 1,425.3

42.2 62.3 30.4 31.9 2.9 21.8

349.1 479.7 310.4 169.3 22.1 135.3

29.4 33.8 19.2 14.6 9.4 3.5

203.6 124.9 60.4 56.8 5.6 1.6 96.2

91.0 44.8 47.9 17.8 9.6 2.3 118.4

138.6 102.7 73.1 35.1 11.4 1.9 69.4

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

144.4 86.5 79.2 36.6 7.8

69.5 64.5 87.2 n.a. 7.8

84.7 121.3 66.4 n.a. 8.8

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

10.5 13.8 16.1

12.5 14.1 16.4

8.1 11.4 13.9

2.2 48.8 1.4 0.2 1.0 9.3

4.2 64.7 1.5 0.4 1.2 9.4

1.5 56.7 0.7 0.6 0.2 2.0

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

43 58.2 21.8 20.0 79.2

632 13.3 8.8 77.9 50.9

17 37.4 4.9 57.7 61.7

Source: National banks and bank regulators, Fitch calculations. Estimates indicated in italics. All data at end-2015

EM Banking System Datawatch June 2016

Banks Asia (Cont.) Sri Lanka (LKRbn)

Taiwan (TWDbn)

Thailand (THBbn)

8,077.5 56.1 4,715.3 n.a. n.a. 937.5 95.2 4,620.0

43,274.3 1,308.7 22,604.1 11,588.0 11,016.1 868.0 332.5 22,271.6

15,666.1 430.4 11,011.8 7,328.9 3,658.3 n.a. 426.7 10,585.1

5,403.1 n.a. n.a. n.a. 636.7 511.8 610.4 4,307.4

30,594.1 11,460.7 19,133.5 2,385.1 3,101.0 n.a. n.a. n.a.

11,253.0 4,808.0 6,445.0 1,121.9 1,754.4 1,597.4 1,965.1 11,478.2

265.8 363.3 178.3 185.0 25.7 97.0

447.0 734.6 386.5 348.1 27.5 280.0

407.3 628.6 291.7 337.0 124.9 175.8

74.0 43.2 57.2 n.a. 19.9 3.2 62.3

259.0 135.3 51.5 48.7 3.8 0.3 555.4

115.7 81.3 67.6 33.2 n.a. 3.0 128.2

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

49.5 87.3 72.6 n.a. n.a.

183.1 73.9 76.2 62.5 5.9

83.1 97.9 80.9 57.3 8.1

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

7.9 11.9 14.2

7.2 10.4 12.8

11.2 13.9 17.1

6.3 49.1 2.5 0.6 1.3 16.1

1.3 52.6 0.8 0.1 0.7 9.6

2.9 46.4 2.2 1.1 1.2 10.7

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

32 n.a. n.a. n.a. n.a.

70 51.8 18.9 29.4 37.0

19 17.5 18.1 64.3 76.3

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Latin America Argentina (ARSbn)

Brazil (BRLbn)

Chile (CLPbn)

1,846.1 199.9 890.9 548.1 342.7 n.a. 21.0 869.9

8,247.1 2,114.6 3,219.5 1,707.3 1,512.2 n.a. 185.8 3,033.7

203,613.2 287.9 141,970.0 85,418.6 56,551.5 27,012.4 3,413.3 138,556.8

1,354.4 n.a. n.a. 22.6 226.9 n.a. n.a. n.a.

1,970.7 n.a. n.a. n.a. 572.0 532.5 679.9 4,294.7

119,567.4 n.a. n.a. 48,849.3 15,425.8 14,997.3 20,034.3 158,745.9

Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income

79.7 224.2 143.5 80.6 12.6 60.0

218.2 419.1 247.3 171.9 132.5 100.9

6,152.5 8,828.4 3,926.4 4,902.0 1,868.9 2,166.6

33.3 16.1 47.1 38.5 n.a. 2.2 105.3

139.7 54.5 36.8 47.0 n.a. 3.4 170.8

129.6 90.4 68.0 39.8 19.0 1.8 136.3

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

24.4 65.8 83.6 n.a. 1.4

33.4 163.4 25.7 n.a. n.a.

76.1 118.7 63.5 n.a. 26.0

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

12.3 12.4 13.2

6.9 12.4 15.8

7.6 9.4 12.6

7.1 64.0 5.1 1.6 3.8 30.4

3.5 59.0 2.2 4.3 1.3 18.1

4.0 44.5 2.5 1.2 1.1 14.5

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

78 41.2 30.3 28.5 54.6

136 45.4 16.9 37.7 69.8

24 16.0 35.1 48.9 72.8

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Latin America (Cont.) Colombia (COPbn)

Costa Rica (CRCbn)

El Salvador (USDbn)

549,829.6 188.9 377,201.9 233,947.7 143,254.2 n.a. 16,935.6 360,266.3

21,336.3 40.1 14,374.1 7,234.2 7,139.9 n.a. 267.9 14,106.1

15.5 15.5 10.8 4.8 6.1 n.a. 0.3 10.6

326,645.6 n.a. n.a. n.a. 76,618.3 52,626.8 77,659.8 494,932.5

13,438.1 n.a. n.a. n.a. 2,441.5 n.a. n.a. n.a.

10.3 1.5 n.a. n.a. 2.0 n.a. 1.9 11.0

23,166.3 39,356.6 18,317.8 21,038.8 8,138.3 10,662.8

887.9 1,145.7 728.8 416.8 230.0 176.9

0.8 0.9 0.6 0.4 0.2 0.2

68.2 46.8 65.5 38.0 n.a. 2.1 211.4

75.7 51.0 66.1 49.7 n.a. 1.8 105.0

60.6 42.6 68.3 56.1 n.a. 2.3 52.9

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

40.5 115.5 69.0 n.a. n.a.

47.7 107.0 71.1 n.a. n.a.

40.4 105.2 76.7 n.a. n.a.

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

13.9 10.6 15.7

11.4 n.a. 13.2

13.1 n.a. 16.8

5.7 46.5 4.1 2.3 2.1 14.4

4.9 63.6 2.0 1.6 0.9 7.6

n.a. 59.2 2.6 2.1 1.0 8.0

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

25 4.1 22.1 73.8 61.8

16 49.8 33.0 17.2 78.5

13 7.6 91.6 0.8 76.7

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Latin America (Cont.) Guatemala (GTQbn)

Honduras (HNLbn)

Mexico (MXNbn)

Nicaragua (NIObn)

264.6 34.8 156.3 104.5 51.8 61.8 3.2 153.1

350.3 15.7 226.4 142.9 83.5 70.1 8.9 217.4

7,772.2 451.7 3,843.0 2,422.4 1,420.6 523.8 140.6 3,702.4

181.9 6.5 118.8 71.6 47.2 110.8 2.7 116.1

192.5 n.a. n.a. 37.9 24.5 19.3 26.5 188.1

236.5 n.a. n.a. n.a. 39.1 27.8 39.1 279.1

4,020.1 n.a. n.a. 205.3 810.7 673.0 758.1 5,065.8

133.6 n.a. n.a. 12.3 19.8 12.9 20.5 157.5

12.4 13.5 9.2 4.3 n.a. 4.0

21.1 27.5 17.8 9.7 4.1 4.6

372.7 481.7 260.3 221.4 122.6 98.8

10.6 15.3 8.2 7.1 1.3 3.8

54.2 32.0 57.9 33.1 39.5 1.4 146.3

79.8 51.6 62.1 36.9 31.0 2.5 159.3

42.9 21.2 47.6 37.0 13.6 2.6 140.5

54.7 35.8 63.8 39.7 93.3 0.9 255.0

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

39.4 81.2 80.2 n.a. n.a.

53.9 95.7 76.0 n.a. n.a.

22.2 95.6 57.7 n.a. 2.9

40.2 88.9 82.4 n.a. n.a.

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

9.3 10.3 14.1

11.2 10.0 14.0

10.4 13.3 15.0

10.9 8.2 13.0

5.4 68.2 1.7 n.a. 1.6 17.1

6.9 64.9 2.9 1.9 1.4 11.9

6.3 54.0 3.0 3.4 1.3 12.6

7.2 53.7 4.2 1.2 2.2 20.7

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

18 1.2 22.3 76.5 82.0

15 n.a. 41.4 58.6 79.0

44 0.9 68.3 30.7 70.3

7 n.a. 44.8 55.2 94.6

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Latin America (Cont.) Panama (PABbn)

Peru (PENbn)

Uruguay (UYUbn)

Venezuela (VEFbn)

98.5 98.5 61.0 41.7 20.4 n.a. 0.5 61.6

358.8 104.5 226.6 170.7 55.9 74.5 9.6 217.0

1,103.9 37.0 611.7 395.1 216.7 347.4 20.2 591.5

4,790.0 760.3 2,532.4 n.a. n.a. n.a. 66.2 2,466.2

71.3 21.1 50.2 35.5 9.9 n.a. 10.3 69.8

214.3 n.a. n.a. n.a. 34.7 29.6 42.3 298.4

839.2 n.a. 839.2 n.a. 96.1 83.4 92.4 630.9

4,206.2 n.a. n.a. 1.2 337.7 n.a. 316,822.1 2,353,924.6

2.3 3.8 2.2 1.6 0.3 1.3

15.0 24.8 10.9 13.9 4.9 7.0

43.0 66.0 45.2 20.8 5.7 10.8

341.3 435.5 210.6 224.9 42.3 142.0

189.0 117.0 62.5 33.5 n.a. 0.8 102.7

58.6 37.0 60.5 24.7 32.9 2.1 202.5

75.5 41.8 53.6 35.4 56.8 2.5 130.9

67.5 35.7 51.5 n.a. n.a. 0.3 945.0

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

136.8 85.5 80.5 70.4 40.1

35.0 105.7 66.1 n.a. n.a.

57.4 72.9 83.3 100.0 n.a.

59.3 60.2 94.5 n.a. 0.0

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

10.0 n.a. 14.8

9.7 9.9 14.2

8.7 13.2 14.7

7.0 n.a. 13.5

2.6 58.5 1.7 0.4 1.4 14.1

6.5 44.0 4.3 2.3 2.2 22.0

4.6 68.5 2.1 1.0 1.1 12.1

13.0 48.4 6.2 2.3 3.9 54.6

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

48 13.1 n.a. n.a. 48.2

17 n.a. 46.8 53.2 86.9

11 45.3 54.7 n.a. 85.8

35 30.7 15.7 53.6 66.3

Source: National banks and bank regulators, Fitch calculations. All data at end-2015

EM Banking System Datawatch June 2016

Banks Middle East (ME)/Africa Bahrain (BHDbn)

Egypt (EGPbn)

Israel (NISbn)

30.9 82.2 7.5 4.2 3.4 n.a. n.a. 7.5

2,485.5 317.4 791.5 597.0 194.5 241.5 n.a. n.a.

1,427.8 364.0 938.4 n.a. n.a. n.a. 12.8 925.6

Funding and capital Customer deposits O/w non-retail O/w retail Foreign funding Equity Tier 1 regulatory capital Total regulatory capital Risk-weighted assets

11.7 n.a. n.a. 14.8 2.6 n.a. n.a. n.a.

1,908.7 716.0 1,198.6 n.a. 141.2 n.a. n.a. n.a.

1,086.4 n.a. n.a. n.a. 99.1 101.6 144.4 1,040.3

Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income

n.a. n.a. n.a. n.a. n.a. n.a.

19.4 34.5 22.6 11.9 0.7 6.9

259.5 63.4 24.4 44.9 n.a. n.a. n.a.

107.0 34.1 n.a. 24.6 30.5 n.a. n.a.

125.7 82.6 64.8 n.a. n.a. 2.0 67.5

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

97.9 64.8 41.2 n.a. 52.1

82.2 41.5 81.4 62.8 n.a.

95.6 86.4 81.8 n.a. n.a.

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

8.4 n.a. n.a.

5.7 11.3 n.a.

6.9 9.8 13.9

n.a. n.a. n.a. n.a. n.a. n.a.

2.3 65.6 1.1 0.1 0.7 9.6

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

n.a. n.a. n.a. n.a. n.a.

19 n.a. 2.0 98.0 95.7

Country Assets and loans Assets Assets (USDbn) Gross loans O/w non-retail O/w retail O/w foreign currency Loan impairment reserve Net loans

Gross loans/assets for Bahrain and Egypt, as net loan numbers are not available. Data for Bahrain includes retail banks only. Data at end-2015 except Israel (9M15) Source: National banks and bank regulators, Fitch calculations

EM Banking System Datawatch June 2016

Banks Middle East (ME)/Africa (Cont.) Kuwait (KWDbn)

Nigeria (NGNbn)

Oman (OMRbn)

Qatar (QARbn)

58.6 194.0 31.8 18.0 13.8 n.a. n.a. 31.8

28,117.6 141.3 12,345.1 n.a. n.a. n.a. n.a. n.a.

28.2 73.3 18.3 10.8 7.5 n.a. n.a. 18.3

1,120.7 307.9 752.6 573.0 179.6 225.9 n.a. 752.6

Funding and capital Customer deposits O/w non-retail O/w retail Foreign funding Equity Tier 1 regulatory capital Total regulatory capital Risk-weighted assets

40.1 n.a. n.a. 4.7 7.6 n.a. n.a. n.a.

20,309.0 n.a. n.a. n.a. 4,993.9 n.a. n.a. n.a.

17.9 n.a. n.a. 4.7 3.7 n.a. n.a. n.a.

650.3 517.4 132.8 310.0 136.9 n.a. n.a. n.a.

Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net incomeb

n.a. n.a. n.a. n.a. n.a. n.a.

n.a. n.a. 659.0 n.a. n.a. 364.0

n.a. n.a. n.a. n.a. n.a. n.a.

Ratios: Lending and asset quality (%) Assets/GDP Gross loans/GDP Net loans/assetsa Retail loans/gross loans Foreign currency loans/gross loans Impaired loans/gross loansb Reserve coverage of impaired loans

161.8 87.9 54.3 43.5 n.a. n.a. n.a.

29.6 12.2 n.a. n.a. n.a. 3.3 n.a.

106.1 68.9 65.0 41.1 n.a. n.a.

182.8 122.7 67.2 23.9 30.0 n.a. n.a.

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

110.7 79.4 78.6 n.a. 9.2

21.4 60.8 87.8 n.a. n.a.

67.3 102.5 72.8 n.a. 19.1

106.0 115.7 66.1 20.4 31.5

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assets Total capital/risk-weighted assets

12.9 n.a. n.a.

17.8 n.a. n.a.

13.0 n.a. n.a.

12.2 n.a. n.a.

n.a. n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. 1.3 7.7

n.a. n.a. n.a. n.a. n.a. n.a.

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

n.a. n.a. n.a. n.a. n.a.

Country Assets and loans Assets Assets (USDbn) Gross loans O/w non-retail O/w retail O/w foreign currency Loan impairment reserve Net loans

Gross loans/assets for all markets, as net loan numbers are not available Data for Nigeria based on the banks which have reported. Source: National banks and bank regulators, Fitch calculations. Data at end-2015 b

EM Banking System Datawatch June 2016

Banks Middle East (ME)/Africa (Cont.) Saudi Arabia (SARbn)

South Africa (ZARbn)

United Arab Emirates (AEDbn)

2,208.8 589.0 1,308.2 970.9 337.3 n.a. n.a. 1,308.2

4,830.5 310.7 3,248.0 n.a. n.a. 338.5 80.2 3,167.8

2,474.4 674.2 1,381.6 964.5 417.1 n.a. n.a. 1,381.6

1,604.8 n.a. n.a. 91.2 313.6 n.a. n.a. n.a.

3,526.6 n.a. n.a. 300.7 341.8 286.2 355.3 2,502.2

1,471.6 1,083.4 388.2 582.8 322.5 n.a. n.a. n.a.

Income statement Net interest income Total operating revenues Operating expenses Pre-impairment operating profit Impairment charges Net income

n.a. n.a. n.a. n.a. n.a. n.a.

135.1 318.5 133.6 184.9 34.7 49.9

n.a. n.a. n.a. n.a. n.a. n.a.

90.2 53.4 59.2 25.8 n.a. 1.2 n.a.

121.0 81.4 65.6 n.a. 10.4 3.5 71.4

190.8 106.5 55.8 30.2 n.a. n.a. n.a.

Ratios: Funding (%) Customer deposits/GDP Gross loans/customer deposits Customer deposits/liabilities Retail/total customer deposits Foreign funding/total liabilities

65.5 81.5 84.7 n.a. 4.8

88.4 92.1 78.6 n.a. 6.7

113.5 93.9 68.4 26.4 27.1

Ratios: Capitalisation (%) Equity/assets Tier 1 capital/risk-weighted assetsb Total capital/risk-weighted assetsb

14.2 15.8 17.8

7.1 11.4 14.2

13.0 16.6 18.3

n.a. n.a. n.a. n.a. n.a. n.a.

3.2 42.0 4.1 1.1 1.1 15.1

n.a. n.a. n.a. n.a. n.a. n.a.

Ratios: Sector structure (%) Number of banks State-owned banks/sector Foreign-owned banks/sector Privately owned banks/sector Five largest banks/sector

n.a. n.a. n.a. n.a. n.a.

49 n.a. n.a. n.a. n.a.

Gross loans/assets for Saudi Arabia and UAE, as net loan numbers are not available Capital ratios for Saudi Arabia at end-9M15 Source: National banks and bank regulators, Fitch calculations. All data at end-2015 b

EM Banking System Datawatch June 2016

Banks Annex 3: Impaired Loan Definitions Definitions of impaired loans, as disclosed in regulatory data, differ significantly across markets, meaning reported asset quality ratios are not always comparable. The following is a summary of the criteria used to define impaired loans in the markets covered in this report:

Impaired Loan Definitions Definitiona Overdue by 90 days or more

Applicable countries Argentina Azerbaijane Bahrainb Brazil Chile Costa Rica Egyptb El Salvador Georgia Guatemala Honduras Hungary India Indonesia Kazakhstan Kuwait Malaysia Mexico Nicaragua Omanb Panamac Poland Qatarb Saudi Arabiab Slovakia Slovenia Sri Lankad Taiwan Thailand Turkey United Arab Emiratesb Ukrainee Venezuela

Overdue by 60 days or more

Uruguay

Overdue by 30/60/90 days (depending on loan type) or more

Colombia Philippines

Overdue by 15/30/90 days (depending on loan type) or more

Peru

Bottom two of five regulatory categories

Russia

Bottom three of five regulatory categories

Belarus China Czech Republic South Korea

Based on combination of quantitative and qualitative factors

Bulgaria Israelb Romania South Africa

Impaired loans data includes full value of loans that meet criteria indicated Definitions for Bahrain, Egypt, Oman, Qatar, Saudi Arabia, UAE (in each case, overdue by 90 days or more) and Israel are those typically used by Fitch when referring to impaired loans at individual banks. However, no system-wide impaired loans data is reported c Panama impaired loan data is based on loans overdue by 90 days or more in most cases. However, loans with bullet repayments, for example, are classified as impaired when they go overdue by 30 days d Sri Lanka impaired loan data reflect loans 90 days overdue or with three missed instalments, depending on the product e Asset quality data on Azerbaijan and Ukraine presented in this report is based on surveys of rated banks, and the criterion used is overdue by 90 days or more Sources: National banks and bank regulators, Fitch b

EM Banking System Datawatch June 2016

Banks

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EM Banking System Datawatch June 2016