Indian banks to have limited credit growth of 12.5% in 2024-25: HSBC
New Delhi: HSBC Global Research in a report said it expects Indian banks’ loan growth to grow in the range of 12.5 per cent in the current fiscal year 2025, adding that a slowdown in GDP growth remains a downside risk. HSBC Securities and Capital Markets (India) Pvt Ltd said in a January 2 report that it expects credit growth to remain range-bound in 2024-25.
“Multiple headwinds such as tight liquidity conditions, slower deposit growth, GDP slowdown and high credit-to-deposit ratio remain key risks to credit growth,” HSBC said.Retail loan growth picked up in November 2024, driven by continued growth in unsecured personal loans, home loans and gold loans. Credit to NBFCs has also got some relief. In November 2024, non-food credit grew by 12.2 per cent year-on-year and 1.3 per cent month-on-month, as against 12 per cent year-on-year and 0.
7 per cent month-on-month in October 2024.
Retail credit grew by 13.3 per cent year-on-year and 1.5 per cent month-on-month, MSME credit grew by 13.8 per cent year-on-year and 0.7 per cent month-on-month and corporate credit grew by 9.6 per cent year-on-year and 1.5 per cent month-on-month in November 2024. The report said that most key retail loan segments witnessed broad-based growth. Home loans grew 12.2 per cent year-on-year and 1.3 per cent month-on-month (0.9 per cent in October 2024).
Growth in the home loan segment should remain stable due to good demand for residential housing, the HSBC report said. Vehicle loans declined 1.8 per cent month-on-month in November, mainly due to lower vehicle sales.
Gold loans grew 6.7 per cent month-on-month and contributed 12 per cent to incremental retail loans in November 2024. “In our view, the slowdown in microfinance loans has increased demand for gold loans as an alternative source of lending,” the report argued.
Credit card receipts grew 18.1 per cent year-on-year in November 2024 (16.9 per cent year-on-year in October 2024).
It said, “The growth in receipts is now higher than the growth in spending through credit cards.
