Covid-19 impact: Loss of fee income likely to add to lenders' woes

Muted lending and subdued cross-selling amidst extended lockdown to hurt fee income and earnings

Expected decline in fee income is adding to woes of the banking sector, the outlook for which is already hazy because of delinquencies and credit costs.

The March 2020 quarter (Q4) results of three major private lenders — HDFC Bank, Axis Bank and IndusInd Bank (results declared so far) — indicate the impact on fee income.

All three reported either a deceleration in fee income growth, or a contraction. HDFC Bank, for instance, lost Rs 450 crore in fee income during Q4, in just the last few days of March when the lockdown started.
 

Though some pressure on fee income was anticipated