Retail advances at India’s most valuable lender HDFC BankNSE 0.61 % expanded at the slowest pace since the quarter ended March 2015, opening up a 12 percentage point gap with the corporate loanbook growth rate, pointing to a likely revival in financing demand from companies.
An analysis of the blue-chip bank’s fourth quarter earnings, released over the weekend, showed that the pace of advances to individuals was at 19 per cent in the March quarter, compared with a 31 per cent growth rat ..
HDFC Bank’s total loan book stood at Rs 819,401crore as of March 2019. Retail loans accounted for 54 per cent of the total advances at the lender.
In the post-earnings call with analysts, the HDFC Bank management said it is watching the retail business closely.
“On the retail front, we have neither seen deterioration nor an improvement… it is relatively stable. So we are watching,” said Sashidhar Jagdishan, CFO at HDFC Bank. “Whenever you see a strong growth rate, the architecture itself pulls back on the growth rate to wait and watch how the portfolio behaves.”
To be sure, analysts say that the relatively slower pace of growth in retail loans cannot yet be attributed to higher risk assessment of the bank on this portfolio.
“So far, it does not look like there is a problem in retail loans. But the industry has been experiencing some issues in SME and MSME segment loans because many of these entrepreneurs take personal loans also to do their business,” said Kajal Gandhi, vice president, research, at ICICIdirect, the retail broking arm of ICICINS ..
An analysis of the blue-chip bank’s fourth quarter earnings, released over the weekend, showed that the pace of advances to individuals was at 19 per cent in the March quarter, compared with a 31 per cent growth rat ..
HDFC Bank’s total loan book stood at Rs 819,401crore as of March 2019. Retail loans accounted for 54 per cent of the total advances at the lender.
In the post-earnings call with analysts, the HDFC Bank management said it is watching the retail business closely.
“On the retail front, we have neither seen deterioration nor an improvement… it is relatively stable. So we are watching,” said Sashidhar Jagdishan, CFO at HDFC Bank. “Whenever you see a strong growth rate, the architecture itself pulls back on the growth rate to wait and watch how the portfolio behaves.”
To be sure, analysts say that the relatively slower pace of growth in retail loans cannot yet be attributed to higher risk assessment of the bank on this portfolio.
“So far, it does not look like there is a problem in retail loans. But the industry has been experiencing some issues in SME and MSME segment loans because many of these entrepreneurs take personal loans also to do their business,” said Kajal Gandhi, vice president, research, at ICICIdirect, the retail broking arm of ICICINS ..
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