India's banking industry to recover finally: S&P

Albeit at a snail's pace.

A revival of India's banking industry following the recent formation of a new, stable government is likely to be gradual.

According to a release from Standard & Poor's Ratings Services, that outlook is according to an industry report card it published entitled "Indian Banks Are Banking On The New Government For Revival."

The release noted that moderate loan growth for the Indian banking system is expected because the investment cycle will take time to revive.

A revival in the capital expenditure cycle, meanwhile, is believed to be some time away because companies have to first recoup returns on their earlier investments.

Here's more from Standard & Poor's Ratings Services:

"We anticipate that the growth in stressed assets will recede in the next two to four quarters," said Standard & Poor's credit analyst Amit Pandey.

"Any material improvement in asset quality will lag economic recovery, corporate deleveraging, decisive steps to alleviate problem of stressed sectors, and some respite on interest rates."

"The profitability of most of the public sector banks we rate will remain modest in fiscal 2015 because of under-provisioned loan books and sizable outstanding standard restructured loans," said Mr. Pandey.