India’s largest private lender, HDFC Bank, announced that it would double the number of loans to private borrowers in the next few years. That decision comes amid rising consumer demand for the pandemic slowdown.
Arvind Kapil, head of retail assets for HDFC Bank, said uncertainty is decreasing and demand is improving as companies seek to bolster growth, as mentioned in a report by Bloomberg. He said this paved the way to reverse the declining credit to this segment that was needed to maintain asset quality.
“We are planning to double our retail asset book in a targeted manner. I can feel a robust demand on the ground. I run business and give you a feel for what I see, ”said Kapil.
From HDFC’s 11.5 billion loan book a year ago, HDFC slowed its personal lending operations to protect asset quality as COVID-19 resulted in business closings and job losses for millions.
HDFC Bank’s loan share fell from an average of 54 to 55 percent to 47 percent in March. It must also be mentioned that the lender has the lowest bad credit rate among its competitors.
Kapil said the lender is “aggressively positioning” to expand its personal loan book, with a plan to accelerate in segments where it can maintain asset quality and provide the best return on investment.
HDFC’s retail lending increased 9.3 percent, compared to 16.5 percent for State Bank of India and 20 percent for ICICI Bank. Lenders saw retail bad loans spike due to the tough second wave. Credit collections have since improved and are back to pre-pandemic levels for HDFC Bank, Kapil said.
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