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Yes Bank on Tuesday said its loans and advances grew 14% year on year (YoY) on a provisional basis to Rs 1.87 trillion as on June 30, 2022. In a similar business update, RBL Bank said its gross advances grew 7% YoY, slower than its peers, to Rs 62,095 crore, while South Indian Bank’s loan book grew 11% YoY to Rs 64,760 crore.
Yes Bank’s deposits grew 18.3% YoY to Rs 1.93 trillion as on June 30, 2022. However, the lender saw its deposit base shrinking 2% on a sequential basis. Its low-cost current account savings account (CASA) ratio improved to 31.6% from 28.1% a year ago.
“With respect to deposits, daily average deposit balances in Q1FY23 have sequentially grown by 4.4% on the back of sequential growth of 9.2% in daily average CASA balances,” Yes Bank said in a communication to the stock exchanges.
RBL Bank’s total deposits grew 6% YoY to Rs 79,217 crore, with the CASA ratio improving to 36% from 33.7% a year ago. The bank’s retail advances de-grew 5% YoY and 3% sequentially while wholesale advances grew 22% YoY and 4% sequentially for the quarter ended June 30, 2022. Retail advances accounted for 51% of the loan book. “Asset quality parameters on the portfolio continue to see improvement in Q1FY23, in line with the improving trend of the past few quarters,” RBL Bank said.
South Indian Bank’s total deposits grew 4% YoY to Rs 88,202 crore as on June 30, 2022. The CASA ratio improved to 34% from 30% a year ago. Most private banks who have shared business updates for the quarter ended June have seen double-digit growth, in line with overall banking system growth. While non-food credit growth improved to 12.6% in May, the pick-up in demand has been uneven and concentrated in metropolitan markets, analysts said.
“We believe that the lenders would continue to remain optimistic of growth and would probably be comfortable to take more risks. This would be reflected in the quality of loan growth where we would look at expansion into MSME (micro, small and medium enterprises), self-employed segments or towards a marginally higher risk-reward segment,” Kotak Institutional Equities said in a recent report.
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The RBI has said that non-bank payment system operators (PSOs) will need prior permission before a takeover of any company or transfer of payment activity.
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A clutch of private banks reported strong provisional loan growth numbers for the quarter ended June. HDFC Bank, Federal Bank, IndusInd Bank, CSB Bank and AU Small Finance Bank (SFB) reported double-digit loan growth in Q1FY23. Deposits grew slower than loans for most banks during the quarter.
HDFC Bank’s advances grew 21.5% year on year (YoY) to Rs 13.95 trillion as on June 30, 2022. Gross of transfers through inter-bank participation certificates and bills rediscounted, the bank’s advances grew 22.5% over June 30, 2021. Retail loans at the country’s largest private lender grew 21.5% YoY in Q1, commercial and rural banking loans grew 29%, and corporate and other wholesale loans grew 15.5%.
During the quarter, HDFC Bank purchased loans worth Rs 9,533 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation (HDFC).
HDFC Bank’s deposits aggregated to Rs 16.05 trillion as of June 30, 2022, up 19.3% YoY. Its low-cost current account savings account (CASA) ratio stood at 46% as of June 30, 2022, as compared to 45.5% a year ago.
Federal Bank’s gross advances grew 16.3% YoY to Rs 1.54 trillion as of June 30, 2022. Its retail credit book grew 16.7% while the wholesale credit book grew 15.8%. Total deposits grew 8.2% YoY to Rs 1.83 trillion as of June 30, 2022. The bank’s CASA ratio improved to 36.84% from 34.81% a year ago.
IndusInd Bank’s net advances grew 18% YoY to Rs 2.5 trillion as of June 30, 2022, while its deposits grew 13% to Rs 3.03 trillion. Its CASA ratio rose to 43.2% from 42.1% a year ago.
CSB Bank’s gross advances grew 16.16% YoY to Rs 16,333 crore and its total deposits grew 8.65% to Rs 20,267 crore. The lender’s gold loan portfolio grew over 26% YoY to Rs 7,099 crore.
AU SFB’s gross advances grew 42% YoY to Rs 49,366 crore and its deposits grew 48% to Rs 54,631 crore.
While FY23 has so far been marked by double-digit growth in credit for the banking system, analysts observed that the growth has not been evenly spread out across segments. In a report dated June 30, Kotak Institutional Equities (KIE) said loan growth is being led by the metropolitan segment off a low base.
“Growth is stronger in smaller ticket loans. Demand on working capital is improving but still weak. Even as private banks are leading on loan growth, we are seeing recovery in public banks as well,” KIE said.
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