OREANDA-NEWS.  In a new report, Fitch Ratings says that slower GDP growth, maturing loan books, currency depreciation and capital outflows are pressuring the credit profiles of emerging market (EM) banks. However, the agency does not expect a broad EM crisis, either in banking systems or in general. The extent of credit deterioration, and of resulting negative rating actions, is likely to be contained due to banks' significant loss-absorption capacity, positive economic growth in most EMs and available sovereign support.

These opinions were presented by the heads of Fitch's financial institutions coverage for Asia Pacific, Latin America and emerging Europe in recent meetings with more than 30 leading EM investors across seven US cities. Some of the main questions and our responses to them are covered in the report, which also features questions on banks in the Middle East and Africa, to cover all major markets in the EM universe.

The greatest focus at the meetings was on prospects for banks in China (the extent of potential asset quality problems as the economy slows), Brazil (exposure to the recession, Petrobras and the weaker real) and Turkey (asset quality and refinancing risks following depreciation of the lira).