HDFC Bank, the country’s largest private-sector lender, posted 13.9 per cent growth in advances in FY21, down from a 21.27 per cent increase in FY20.
Sequentially, advances of HDFC Bank were up 4.6 per cent in the quarter ended March 2021. This is, perhaps, the lowest growth in 17 quarters seen by the bank in terms of advances on a year-on-year (YoY) basis, according to the Capitaline database.
Three other private-sector lenders — IndusInd Bank, YES Bank, and Federal Bank —reported credit growth ranging between 0.8 and 9 per cent on a YoY basis in FY21.
The pace of credit expansion for HDFC Bank was less than its growth trajectory of the last few years (24.5 per cent in FY19, 18.7 per cent in FY18, 19.4 per cent in FY17). But it is substantial, given the scale of economic disruption caused by the pandemic and lockdown in the country, analysts said.
Commercial banks’ lending expanded by just 6.5 per cent YoY till March 12, 2021, according to the Reserve Bank of India (RBI) data.
HDFC Bank’s advances were at Rs 11.32 trillion at the end of March, up from Rs 9.93 trillion at the end of March 2020, according to a filing with the BSE. Its stock closed 2.52 per cent lower at Rs 1,449 on the BSE. The bank’s board is slated to meet on April 17 to take stock of the performance in FY21.
Growth in domestic retail almost halved to 7.5 per cent in FY21, down from 14.6 per cent in FY20. The pace of growth in the wholesale segment slowed to 21 per cent in FY21 from 29.3 per cent a year ago.
The bank is facing curbs clamped by the Reserve Bank of India on issuing new credit cards and new digital launches for outages due to technical glitches.
The pace of credit offtake began to rise in the second half of FY21 in tandem with economic recovery. According to a report by ICICI Securities, with the gradual recovery in economic activities after the opening up of the economy, the banking industry has seen a pick-up in loan growth -- from 5.6 per cent in October 2020 to Rs 6.5 per cent in February 2021.
The retail segment has been one of the key contributors in credit growth the banking sector has seen. It grew 9.6 per cent in February 2021, driven by housing, auto, and gold loans, led by a surge in sales volumes.
IndusInd Bank saw its advances go up by 3 per cent to Rs 2.13 trillion by March 2021.
For YES Bank, a lender gradually moving to a steady path after restructuring, loans and advances grew by a marginal 0.8 per cent to Rs 1.72 trillion in March 2021. Its gross retail disbursements during the March quarter were at Rs 7,828 crore, up by 154.3 per cent from the year-ago quarter’s Rs 3,078 crore.
Federal Bank posted 9 per cent growth in advances at about Rs 1.35 trillion for FY21 as against 11.02 per cent in FY20.
On the liabilities side, HDFC Bank saw its deposits grow 16.3 per cent to Rs 13.35 trillion as of March 31, 2021, from Rs 11.47 trillion in March 2020. The share of low-cost deposits —current account savings account (CASA) — rose to around 46 per cent as of March 31, 2021, from 42.2 per cent as of March 31, 2020.
Thanks to the tendency to park more amounts with banks during the pandemic, deposits grew by 12.1 per cent YoY till March 12, 2021, up from 9.1 per cent a year ago, according to the RBI data.
IndusInd Bank’s deposits have gone up by 27 per cent YoY to Rs 2.56 trillion in March 2021. For YES Bank, growth in deposits was more than 50 per cent YoY at Rs 1.62 trillion in FY21 since in FY20 the bank had seen erosion in its deposit base due to uncertainties around its sustainability.
Federal Bank’s deposits rose by 13 per cent to Rs 1.72 trillion in FY21.