ICICI Bank, Kotak Mahindra and IndusInd Bank logged their best performance in at least five years, a report by Economic Times informed.
As per the report, the robust performance came as corporate credit gathered momentum amid capacity expansions and as retail demand for cars and homes remained largely unaffected by the recent surge in inflation.
Sumant Kathpalia, MD, IndusInd Bank told the market daily, "We were very cautious, but we see growth coming back. I think the economy is looking up. We never expected a rebound in July the way it has happened. We are seeing MFI demand coming up. We are seeing demand from corporates coming up. We have given an indication of 16 to 18 percent growth."
IndusInd Bank posted a 54 percent rise in its total advances to ₹1.33 lakh crore. The main drivers came in from the vehicle finance book which expanded by 26 percent while the non-vehicle finance grew by 16 percent, ET noted.
Meanwhile, for ICICI Bank, the loans expanded 21.3 percent YoY with retail loans climbing 24 percent, business banking portfolio growing 45 percent and domestic wholesale banking portfolio rising 14 percent, said the report.
Kotak Mahindra Bank also posted strong loan growth of 29 percent YoY with 35.2 percent of these incremental advances coming in from the unsecured segment, added ET.
"The overall lending atmosphere is also conducive to taking some risks," Dipak Gupta, joint MD, Kotak Mahindra Bank told ET, adding that "After all, the unsecured lending also gets us better margins."
The report pointed out that overall bank credit growth at 14.4 percent as of July 1 is at a three-year high with corporate demand coming back as the economy revives after the lifting of Covid restrictions. It stated that the credit growth has successively picked up over the last four-five fortnights, however, economists say a lot of demand is working capital demand due to a surge in raw material prices rather than for Capex.
Other factors are also driving bank credit growth, said the report. "A lot of this is because of high commodity prices. There is an increasing diversion of funds from the markets. Also, there is demand for funds (from importers) because of dollar depreciation," it added.
