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Banks see revival in credit growth in December quarter

Private lender HDFC Bank on Tuesday reported that its advances growth showed a strong momentum and rose by more than 16.4% at the end of the December quarter to reach Rs 12.6 lakh crore. Its total loans had stood at Rs 10.8 lakh crore in the same period last year. The proforma numbers reported by the bank in a regulatory filing showed that its numbers had improved from the recent low growth of 14%.

“HDFC Bank’s provisional business data is encouraging given the strong momentum in relatively higher yielding retail, commercial segment and CASA,” said Darpin Shah, VP, Haitong Securities. “We believe the improvement in these parameters is expected to drive net interest margins.”

As per the Bank’s internal business classification, retail loans grew by around 13.5% in the December quarter while commercial & rural banking loans grew by around 29.5% and corporate & other wholesale loans grew slower by around 7.5% over December 2020.

Deposit growth was steady at 14% and grew to Rs 14.46 lakh crore at the end of December 2021. Retail deposits grew by around 17% while wholesale deposits grew by around 1%. HDFC Bank’s current and savings account deposits stood at Rs 6.8 lakh crore, a growth of around 24.6% over last December period.

“HDFC Bank’s strong presence in semi-urban and rural areas has helped to expand this book aggressively over the past few years,” said Suresh Ganapathy, associate director, Macquarie Capital. “We believe margins can improve going ahead due to faster growth in retail loans.”

Meanwhile, another private lender

too reported a 10.7% rise in its gross funded assets to Rs 1.22 lakh crore as of December 2021 quarter.

Its total deposits grew by 10.48% to Rs 85,387 crore as compared to Rs 77,289 crore from the year-ago quarter, provisional numbers showed. Housing loans grew by 44.2% while the mortgage-backed businesses grew 27.4% as of December 31, 2021.

State-run lender

said its December quarter loans grew by more than 23% at the end of the quarter under review taking the total book to Rs 1.29 lakh crore. Its total business grew by 18.28% over the last year period to Rs 3.15 lakh crore. The public lender also posted a deposit growth of 15.21% to Rs 1.86 lakh crore.

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