Revenues growth from corporate banking moderates to 4% in 2023: CRISIL unit

Cash management growth to temper somewhat as peak rates level off: Study

The pace of growth in the revenue pool from corporate banking services for banks in India moderated to 4 per cent year-on-year in calendar year (CY) 2023, down from 15 per cent in CY 2022, according to Coalition Greenwich, a research unit of CRISIL.

While cash management exhibited strong growth due to momentum from higher rates in 2023, this business is expected to temper somewhat as peak rates level off.

Investment banking pools registered double-digit gains as primary activity in capital markets increased. Lending, however, toned down slightly as corporates focused on strengthening balance sheets in the face of elevated rates.

The CRISIL unit, in its ‘Voice of Client — 2024 India Corporate Banking Study’, noted that the majority of corporates have a positive outlook for their businesses in the year ahead.

Corporates in India are moving to capitalise on bullish domestic macro conditions by expanding into international markets.

Approximately 83 per cent of large India-headquartered corporations now employ at least one bank for cross-border trade and payments — a metric that serves as a good proxy for international operations. This share is up from 71 per cent just two years ago.

Coalition Greenwich highlighted that while foreign banks bring a robust network and product capabilities in international banking, two strong trends are helping Indian banks compete in this arena.

First, Indian banks’ digital capabilities increasingly match those of more established foreign banks, particularly in speed-to-market.

Digital capabilities are an important differentiator and key selection criteria for corporates across markets and geographies when choosing a banking provider.

Second, thanks to higher interest rates internationally and a slightly reduced lending appetite of some foreign banks, Indian banks have been able to compete effectively on pricing and balance sheets, the study added.