HDFC Bank retail loans up 25% in FY10

In March alone, Rs 4,000 cr disbursed. Bank says numbers point to revival of consumer confidence

The country's second largest private sector lender HDFC Bank saw its retail loan book growing by a smart 25 per cent in the past fiscal on the back of healthy demand from home, auto and personal loan segments.
     
In March alone, the lender disbursed around Rs 4,000 crore retail advances, out of which auto loan comprised Rs 1,300 crore, home loan Rs 1,200 crore and personal loan around Rs 600 crore, HDFC Bank country head for retail assets & credit cards Pralay Mondal told PTI.
     
"Overall there is a pick-up in demand for retail loans. Clearly, the consumer confidence has come back and we expect to sustain the growth momentum in the current fiscal as well," Mondal told PTI in an interview.
      
During the past fiscal, HDFC Bank is understood to have clocked a growth of 30-35 per cent in its total loan book, which is way above the average growth achieved by the industry during the period. The credit growth in the banking industry in last year stood at 16.7 per cent just above the 16 per cent credit growth target set by the Reserve Bank.
     
On Friday, private sector lender IndusInd Bank announced a 30 per cent loan growth in FY10 and said the growth in FY11 is likely to be 25-30 per cent.
      
Promoted by mortgage lender Housing Development Finance Corporation, HDFC Bank has total gross advances of Rs 1,21,051 crore and total deposits stood at Rs 1,54,789 crore as on December 31, 2009.
      
As of now, nearly 55 per cent of its loan book comprise retail assets and the rest corporate advances. Moving ahead, the lender would focus equally on both portfolios, Mondal said.
      
Mondal said considering a visible return of credit demand in the market, even an expected upward movement in lending rates during this year, is unlikely to impact the credit offtake of banks. The industry will see a 0.50-1 per cent hike in lending rates in this fiscal and the rates are likely to start rising in the next quarter.
     
"I expect a 50-100 basis points increase in lending rate during the course of this year. It could start happening in the next quarter," Mondal said.
       
The Reserve Bank which will announce its annual monetary policy on Tuesday is widely expected to hike its short-term lending and borrowing rates--repo, reverse repo--which may prompt banks to pass on the burden to their customers, if not in the immediate future.