HDFC Bank, the country’s largest private sector lender, saw advance growth of 13.9% in FY21, compared to an increase of 21.27% in FY20.
Sequentially, HDFC Bank’s advances increased 4.6% in the quarter ended March 2021. This may be the weakest growth in 17 quarters recorded by the bank in terms of advances in year-on-year, according to the Capitaline database.
Three other private sector lenders – IndusInd Bank, YES Bank and Federal Bank – reported credit growth of 0.8 to 9 percent year-on-year in FY21.
The pace of credit expansion for HDFC Bank has been lower than its growth trajectory in recent years (24.5 percent in FY19, 18.7 percent in FY18, 19, 4 percent in fiscal year 17). But it is substantial, given the scale of the economic disruption caused by the pandemic and the lockdown in the country, analysts have said.
Commercial bank lending only grew 6.5% year-on-year through March 12, 2021, according to data from the Reserve Bank of India (RBI).
Advances from HDFC Bank stood at 11.32 trillion rupees at the end of March, compared to 9.93 trillion rupees at the end of March 2020, according to a file filed with the ESB. Its action closed down 2.52 percent at Rs 1,449 on BSE. The bank’s board of directors is due to meet on April 17 to take stock of fiscal year 21 performance.
Domestic retail growth almost halved to 7.5% in FY21, from 14.6% in FY20. The growth rate of the wholesale segment slowed to 21 percent in FY21, from 29.3 percent a year ago.
The bank faces restrictions imposed by the Reserve Bank of India on issuing new credit cards and new digital launches for outages due to technical issues.
The pace of borrowing started to pick up in the second half of FY21, in line with the economic recovery. According to a report from ICICI Securities, with the gradual recovery of economic activities after the opening of the economy, the banking sector has seen an acceleration in loan growth – from 5.6% in October 2020 to Rs 6.5 % in February 2021.
The retail segment has been one of the main contributors to credit growth in the banking sector. It rose 9.6% in February 2021, driven by home, auto and gold loans, led by higher sales volumes.
IndusInd Bank saw its advances increase by 3% to reach 2.13 trillion rupees in March 2021.
For YES Bank, a lender gradually moving to a stable trajectory after restructuring, loans and advances increased by a marginal 0.8% to Rs 1.72 trillion in March 2021. Its gross retail disbursements during the quarter March was Rs 7,828 crore, up 154.3 percent from Rs 3,078 crore in the quarter a year ago.
The Federal Bank posted 9 percent growth in advances to around Rs 1.35 trillion in FY21, up from 11.02 percent in FY20.
On the liabilities side, HDFC Bank saw its deposits increase by 16.3% to reach 13.35 trillion rupees as of March 31, 2021, compared to 11.470 billion rupees in March 2020. The share of low-cost deposits – savings account in current account (CASA) – increased. at approximately 46% as of March 31, 2021, compared to 42.2% as of March 31, 2020.
Thanks to the trend to park more amounts with banks during the pandemic, deposits rose 12.1% year-on-year through March 12, 2021, up from 9.1% a year ago, according to data from the RBI.
IndusInd Bank’s deposits grew 27 percent year-on-year to reach 2.56 trillion rupees in March 2021. For YES Bank, deposit growth was over 50 percent year-on-year at 1. 62 trillion rupees in FY21 because in FY20 the bank experienced an erosion of its deposits. basis due to uncertainties surrounding its sustainability.
Federal Bank deposits increased 13% to 1.7 trillion rupees in FY21.