In the December quarter, the story for HDFC Bank Ltd was not any different from those of other lenders when it came to loan growth. Despite rosy projections of a 7.5% economic growth in that quarter, credit demand lagged. HDFC Bank’s advances grew 17% from a year ago, the lowest in four quarters.
While the bank’s focus on the retail customer has led this segment to account for 51% of its loan book, growth was faster in the corporate segment at 20%. But that is not exactly a reason to cheer because it was mostly working capital demand and loans to small and medium enterprises—a segment susceptible to bad loans. Even in the retail segment, unsecured loans such as personal loans and credit cards are growing at a robust pace, confirming that this is an environment with fewer growth opportunities for lenders.