Motilal Oswal: India’s Financial Sector- Credit Growth Subdued; Retail Credit Moderates To Six-Year Lows  
A customer holds a bundle of Indian rupee banknotes while filling in a deposit form at a branch of the HDFC Bank Ltd. in Mumbai, India (Photographer Dhiraj Singh/Bloomberg)

Motilal Oswal: India’s Financial Sector- Credit Growth Subdued; Retail Credit Moderates To Six-Year Lows  

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Banking financial services and insurance sector’s systemic loan growth moderated to 5.8% YoY (approximately 1% QoQ decline) for the fortnight ended July 17, 2020. The outstanding credit base has now reached Rs 102 trillion.

Retail credit growth moderated to 10.5% YoY (2.5% QoQ decline) versus 17% YoY (5.3% QoQ increase) in February 2020. Credit card growth moderated to approximately 3% YoY (approximately 10% QoQ decline) versus approximately 33% YoY (5% QoQ increase) in February 2020, while Auto loans grew 7% YoY (3% QoQ decline).

Growth in industry segment was subdued at 2.2% YoY while growth in Services segment moderated to approximately 10.7% YoY.Agri growth too remained muted at 2.4% YoY.

Most private banks reported sequential decline in loan growth during Q1 FY21 with Kotak Mahindra Bank Ltd./IndusInd Bank Ltd. reporting sharp QoQ decline of approximately 7%/4%. However, HDFC Bank Ltd. reported 1% QoQ growth (21% YoY).

The moderation in loan growth was due to (a) the Covid-19 led lockdowns, (b) weakening of credit demand in consumer retail/micro finance institution/small and medium enterprise segments, (c) banks’ cautious stance in lending.

Click on the attachment to read the full report:

Motilal Oswal Financials Sector Update.pdf


This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.