Banking Risk Monthly Outlook: September 2025

Our banking risk experts provide insight into events impacting the financial sector in emerging markets in September.

What we're watching:

• Higher US tariffs on Indian goods increase the chance of a targeted loan moratorium.
• Russian bank lending activity likely to remain weak despite rate cuts.
• Serbia’s credit growth to slow after central bank orders banks to offer borrowers more favorable terms on household loans.
• Further measures to rein in excess liquidity of Argentinian banks are likely to curb credit growth.
• New high quality liquid assets (HQLA) requirement for Ghanaian banks is likely to strengthen resilience to liquidity shocks.

Higher US tariffs on Indian goods increase the chance of a targeted loan moratorium.

The US announced in early August that India will face higher tariff rates from Aug. 27. Owing to the sectors (electronics, textiles, pharmaceutical and gems sectors) most impacted by the US trade tariffs only accounting for around 2.8% of total banking sector loans, the impact is likely to be minimal for Indian banks.

Still, the central bank and government will likely introduce loan moratorium or loan guarantee schemes for these sectors to limit contagion risks. The impact on asset quality is expected to be restricted due to the small proportion of loans and will not impact our overall assessment of the banking sector’s risks.

Russian bank lending activity likely to remain weak despite rate cuts. 

Monetary policy loosening since June 2025 — a cumulative 300 basis point reduction, taking the key policy rate to 18% — is expected to lower the cost of bank credit and stimulate borrower demand.

Tighter lending requirements that remain in place and increased cautiousness on ongoing loan quality deterioration will contain the upside to credit growth for the remainder of the year. Prospective borrowers have shifted toward microfinance firms, which will keep our forecast of lending growth lower in 2025 versus 2024.

Serbia’s credit growth is expected to slow after central bank orders banks to offer borrowers more favorable terms on household loans. 

Following news that Serbia's government would order a cap on food and consumer goods profit margins as well as tighten the interest rate cap on cash loans in late-August — in order to "increase purchasing power and living standards” — the Serbian National Bank ordered banks to update their loan offers by Sept. 15, 2025, to improve the affordability of consumer and cash dinar loans and housing loans, for employed individuals and retirees with a monthly income of up to 100,000 Serbian dinars.

The central bank’s recent measures are likely to increase demand for loans; the significantly lower margin for banks is likely to sharply reduce supply and will result in slower loan growth.

Further measures to rein in excess liquidity of Argentinian banks are likely to curb credit growth.

Following the tightening of liquidity rules in mid-August, banks displayed some objections to the measure, suggesting that it would likely reduce their capacity to provide credit to the private sector. As a result — and considering that the measures create new incentives to increase the demand for government bonds — we expect that credit growth will likely be more contained over the remainder of the year compared to the past year, provided that expectations of political uncertainty and pressures over the foreign exchange persist.

Ghanaian banks’ resilience to liquidity shocks likely to strengthen in response to new high quality liquid assets (HQLA) requirement. 

At a post Monetary Policy Committee meeting with bank executives in Accra, the Bank of Ghana (BoG) Governor Johnson Asiama announced that the BoG will implement a Liquidity Risk Management Directive mandating banks to hold HQLA to withstand a 30-day stress scenario as part of the wider regulatory reforms. We expect this to increase banks’ resilience to liquidity shocks and enhance overall liquidity management.

—With contributions from Tan Wang and Thandeka Nyathi