Retail Loan Growth

Pace of customer liabilities expands at slower pace of 12.8 per cent YoY

Major private lenders such as HDFC Bank, ICICI, Axis revise rates; deposit rates now catching up with RBI rate hikes

A recovering economy may lead to higher credit demand from corporates, despite rising rates and there are signs that retail consumption is picking up

Fund flow to the sector has improved but some smaller MFIs still find it difficult to access finance from banks

The country's largest lender reported a 14.93 per cent rise in advances to Rs 29,00,636 crore in the first quarter ended June 30, 2022 as compared to Rs 25,23,793 cr during the same period a year ago

Development fuels concern that slow deposit growth could emerge as one of the biggest constraints for loan growth in the system

RBI data showed that credit to industry grew 8.7 per cent in May

Large public sector banks (PSBs) have revised upwards their credit growth target for the current financial year

Nation's biggest lender State Bank of India wants to nearly double its credit growth rate to 10% in the year started April 1, but is willing to miss the goal.

Credit to Mid, small units also see higher growth

Muthoot Fincorp is the flagship of the diversified Muthoot Pappachan Group

In August 2020, when RBI raised the LTV for gold loans to 90 per cent, effective till March 2021, gold price was at a record high. It's time to pare the LTV for de-risking the lenders

Motilal Oswal Financial Services believe the strong traction in retail loans was aided by festive demand and an improved economic outlook

But increase may be lower than what it was earlier

Loans in the retail segment contracted 2.5 per cent to Rs 24.90 trillion

Asia's banking sector profitability will also decline from deteriorating asset quality and lower net interest margins, said Moody's

Categorised as unsecured loans, these will feel the brunt of weak demand and income disruption of borrowers

Banks had grown their retail books in a big way in recent times given the lacklustre demand for corporate credit

While headline numbers met estimates, quality of loan growth and asset quality didn't. This explains the 1.8% dip in its stock price on Monday

While concerns have been expressed of late that stress may be on the rise in the retail loan books, it is also true that lenders now have access to a plethora of data points for credit assessment