Synopsis
• Gross bank credit offtake witnessed an increase of 20.3% year-on-year (y-o-y) in January 2024 propped by the impact of the merger between HDFC Bank and HDFC along with the sustained demand from the personal loans and services segments which offset the comparatively tepid growth in the industry segment. Without
considering the merger, the y-o-y growth stood at 16.1%, lower by 0.2% than last year’s growth number of 16.3%.
o Personal loans witnessed a robust growth of 28.8% y-o-y due to the impact of the merger (reclassification of HDFC’s advances), and growth in credit card outstanding, other personal loans and housing loans.
Excluding the merger impact, the growth rate reduced by around 230 bps to 18.4% in January 2024 on a y-o-y- basis.
o Services segment reported a rise of 23.9% y-o-y in January 2024 (higher than 22.9% in December 2023) due to growth in trade, commercial real estate, and Non-Banking Financial Services (NBFCs) (lower compared to the prior period). It also reported a robust growth of 20.7% y-o-y vs. 21.4% a year ago without considering the merger.
o Industry growth reduced to 8.3% y-o-y in January 2024 from 8.6% in December 2023 and 8.7% in January 2023 as growth in large corporates decelerated and due to slower growth in Micro, Small & Medium Enterprises (MSME).
• Incremental gross bank credit rose by 17.3% in January 2024. Without considering the merger (at 13.3%), it was higher by approximately 110 bps from 12.2% over a year ago.
