MUMBAI : Indian banks may need to raise $20 billion additional capital over the next 12 months as credit quality weakens, resulting in increased provisioning, according to a report by securities firm Credit Suisse.
The foreign brokerage in its report on Wednesday said that it estimates private sector banks will raise $7 billion worth of capital and public sector banks may require $13 billion worth of recapitalisation. "We raise our credit cost estimates by 20-60% given the lockdown extensions and unimpressive fiscal stimulus.
Private banks tier-1 is healthy at 13%, and coupled with strong pre-provisioning profitability, adequate to absorb up to 4% additional credit costs," said Ashish Gupta, head of equity research at Credit Suisse. “We,