HDFC Bank lost to some of its competitors loans amounting to nearly ₹50,000 crore after it increased interest rates in May, said Chief Financial Officer Srinivasan Vaidyanathan in an analyst call, reported Business Standard.
“There were some customers who were offered lower rates by other market participants. But we decided not to cut back on our rates,” he said.
Credit growth has increased with economic activities picking up in the last few months. According to the latest RBI data, for the fortnight ended July 1, 2022, non-food credit grew 13.8 per cent year-on-year (YoY).
Credit demand in the industry segment has been high with capacity utilisation picking up, and with the change in interest rate dynamics, part of the capital market credit has moved towards banks.
HDFC Bank’s asset mix in the January-March quarter tilted heavily in favour of the wholesale segment even at the cost of margins.
From the pre-pandemic mix of 55:45 between retail and non-retail, HDFC Bank’s retail loan share dropped to 39 per cent as on March 31, 2022. The share of retail loans remained at 39 per cent even at the end of the June quarter, with corporate and commercial and rural banking making up for 26 per cent and 35 per cent, respectively.
In first quarter of fiscal 2023, HDFC Bank’s retail loan portfolio registered 22 per cent YoY growth. “The vehicle segment was hampered by supply chain issues. Despite that, it (retail segment) did grow well. Retail, excluding the vehicle segment, grew 25 per cent YoY. We do see good demand across most of the products,” Vaidyanathan said.
The credit card portfolio also saw strong growth as the bank, which is the largest in the business in the country, issued around 1.2 million credit cards in the quarter, the highest ever in a quarter, taking the total to 17.6 million.