Banks sustain their margins

Through prudent asset mix with lower credit risk, though with limited loan growth, banks have so far managed to sustain their margins.Positivity by the banking industry was witnessed in terms of rising spreads this year, as 25 basis points were added to spreads, to 7.86%. Outstanding loan rate at the start of the year 2011 stood at 13.52%, which moved forward to 13.78% by June 11. In the meantime, deposit rates were at 5.91%, which slightly went up to 5.9 percent in June. Private banks enjoyed the highest spreads in the industry, standing at 7.61percent in December 2010 and 7.77percent on March 11. However, public banks took charge in the second quarter posting a spread of 7.7 percent in March 2011, which rolled forward to the highest at 8.42 percent in June 2011.Banking spreads on outstanding lending and deposits went up by 26 basis points year to year in June 2011. Outstanding loans and deposits moved in tandem with 39 basis points year to year increase in loan rates to 13.78 percent and 13 basis pointsyear to year increase in deposit rates to 5.92 percent in June 2101. Spreads on a MoM basis also shot up by 21 basis points, which was 7.6 percent on May 2011.