Home / Industry / Banking /  Good order books at cos, says HDFC Bank

MUMBAI : HDFC Bank expects banking industry credit growth to be around 12-14% next financial year driven by retail credit growth and partly by corporate credit growth. Speaking to Mint, Kaizad Bharucha, executive director of HDFC Bank, said corporates are borrowing to fund brownfield projects which could supplement credit growth in the system.

“I see consumption has been driving the growth and consumption has continued to be very positive. And I think that will continue. What will happen is that this will get further supplemented with growth coming in from brownfield projects and certain Greenfield projects. We closed credit growth at somewhere between 16-17%. This factored in the base effect. Next year we could see 12 to 13% on a larger base," said Bharucha.

“I see large corporates being able to sustain. Though there is some base effect benefit, I see them being able to sustain going forward, sitting on good order books, which is from their regular clientele. So, it’s not order book filling," he added.

In the third quarter, HDFC Bank saw a strong 21.4% growth in retail loans along with a 20.3% growth in corporate loans.

Total advances growth stood at 19.5% year-on-year and deposit growth at 19.9%. However, the private sector fell short of meeting its target on deposit mobilization of 1 trillion per quarter.

Instead the bank saw only an incremental deposit growth of 59,796 crore, compared to 68,648 crore in the previous quarter.

The private sector lender, which is in a merger process with its parent HDFC Ltd, has set a target to mop up 4 trillion, or roughly 25% of its current deposit base, per year.

Bharucha maintains that deposit growth will be crucial to ensure that credit growth in sustained. “Deposit accretion you know would be an important factor, but I don’t think it will stall growth. It may in a way increase the price," he said.


Gopika Gopakumar

Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
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