SINGAPORE - Rating agency Moody's Investors Service said on Thursday that it saw a negative outlook for Southeast Asian banks and that rising bad loans in the global slowdown were also affecting lenders' performance in India. 

"The slowdowns are clearly making themselves felt on the performances of banks in Southeast Asia and India," Jerry Chien, managing director for Moody's Financial Institution Group in Asia Pacific, said in a statement. 

Moody's on Thursday released its annual Asian Banking System Outlook, in which it said Thai banks' intrinsic financial strength remains adversely affected by the economic crisis and domestic political instability. 

In Indonesia, banks will face increasing pressure in the next year -- particularly from asset quality -- although they will fare relatively better than their regional counterparts as the economy slows, rather than contracts, the report said. 

Moody's expected loan demand to soften and credit costs to rise in Malaysia and Singapore as lower earnings weaken the repayment ability of borrowers. 

Rising loan delinquencies in India's banking system are challenging asset quality and profitability, while some public-sector banks may need fresh capital, which could come from the Indian government, the report said. 

"What's getting worse? It's the global recession and the next wave is going to hit Asia," said Deborah Schuler, senior vice president and global credit officer at Moody's.