India, Indonesia banks set to win as global rates turn

Good business: A worker walks past the Reserve Bank of India logo in New Delhi. Indian banks have delivered double-digit loan growth over the past few months due to rising demand for credit in the world’s most populous but under-banked nation. — Reuters

AS Asia’s banking sector navigates a peak in global interest rates and risks of slower growth, investors are wagering that banks in India and Indonesia have the strongest loan and profitability profiles to provide returns next year.

Over the past 18 months, Asian central banks tracked the US Federal Reserve (Fed) tightening monetary policy to battle inflation but their interest rates hikes were smaller and slower, resulting in better interest income for the region’s banks without loan growth suffering.