## Figure 1.16. Emerging Market Bank Capital and Asset Quality

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### 1. Tier 1 Capital Ratios (Percent)
- Aggregate capital ratios are improving.
- Vertical axis tick labels shown: 2010 11 12 13 14 15 16.
- Horizontal percent scale shown: –5.0, –4.0, –3.0, –2.0, –1.0, 0.0, 1.0, 2.0.
- Countries listed on chart: United Arab Emirates; EM excluding China.

### 2. Bank Price-to-Book Ratio versus Cumulative Credit Growth
- ... but equity markets are concerned about excessive credit growth.
- X-axis: Change in bank credit to nonfinancial sector as percent of GDP, 2011–15 (percentage points) with ticks: 0 5 10 15 20 25 30 35.
- Y-axis: Sector price-to-book ratio (multiple, Mar. 31, 2017) with ticks: 0.5, 1.0, 1.5, 2.0, 2.5, 3.0.
- Country/region labels shown on the scatter: Emerging markets excluding China; China; Saudi Arabia; Colombia; South Africa; Mexico; Thailand; Indonesia; Turkey; China; Brazil; Malaysia; Poland; India; Russia.
- Reported goodness of fit: R 2 = 0.5772.

### 3. Bottom Quartile of Banks by Profitability: Return on Assets (Percent)
- Profitability is low at some weak banks.
- Vertical axis tick labels shown: 2010 11 12 13 14 15 16.
- Countries listed in order on chart: China; Poland; Thailand; South Africa; Mexico; Saudi Arabia; Malaysia; Russia; India; Turkey; Indonesia; Brazil.

### 4. Nonperforming and Problem Loans as a Ratio of Gross Loans (Ratio)
- ... and asset quality is deteriorating in many countries.
- Vertical axis tick labels shown: 2010 11 12 13 14 15 16.
- Series identified on chart:
  - China: NPL ratio including problem loans
  - EM excluding China: NPL ratio including problem loans
  - China: NPL ratio
  - EM excluding China: NPL ratio
  - Range for the bottom quartile
  - Weighted average for the bottom quartile

*Sources: Bank for International Settlements; Bloomberg L.P.; Morgan Stanley Capital International; SNL Financial; and IMF staff calculations. Note: EM = emerging market; NPL = nonperforming loan.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2017/april/chapter-1/figure1-16.pdf_