APAC emerging market banks to enjoy double digit credit growth: report

China and Thailand will feel the most pressure, especially Chinese banks’ margins.

Top emerging market (EM) banks in the Asia Pacific (APAC) region are expected to enjoy double digit average credit growth thanks to “generally sound economic prospects,” according to Fitch Ratings.

However, pressures will be most felt in China and Thailand, the ratings agency said in a report published on 7 April 2025.

Net interest margins (NIMs) will likely remain under pressure, mainly in China. However, it could be supported by rate trajectories and risk appetite.

Return on equity (ROE) is expected to largely hold up despite what Fitch calls ongoing challenges to profit growth.

Asset quality risks remained skewed to the downside, it added.

Risks to watch out for are geopolitical risks and trade tensions that can disrupt EM market’s economic growth; a strong US dollar derailing monetary policy easing; and asset quality risks to weaker segments such as small and medium enterprises (SMEs), unsecured lending, and real estate.

There’s also the possibility of heightened risk appetite due to pursuit of loan growth and higher yields, Fitch said.