Indian banks to undergo around 12.5% ​​credit growth in 2024-25: HSBC – Newz9

Indian banks are anticipated to obtain a credit score growth of 12.5 p.c in the monetary yr 2025, in accordance to a report by HSBC Securities and Capital Markets (India) Private Limited printed on Friday.
However, the report additionally cautioned {that a} slowdown in GDP growth may pose dangers, maintaining credit score enlargement vary-certain in 2024-25.
The report additional highlighted a number of challenges, “Multiple headwinds like tight liquidity conditions, muted growth in deposits, GDP slowdown and high loan-to-deposit ratio remain key risks to credit growth.”
Despite these considerations, the retail mortgage sector confirmed optimistic momentum in November 2024, pushed by sturdy demand for unsecured private loans, regular growth in dwelling and gold loans, and a few restoration in credit score prolonged to non-banking monetary firms (NBFCs).
Non-food credit score grew by 12.2 per cent yr-on-yr in November 2024, in contrast to 12 per cent in October, with month-on-month growth bettering to 1.3 per cent from 0.7 per cent.
Retail loans elevated by 13.3 per cent yr-on-yr and 1.5 per cent month-on-month, whereas loans to micro, small, and medium enterprises (MSMEs) rose by 13.8 per cent yr-on-yr and 0.7 per cent month. -on-month.
Corporate loans additionally noticed an increase of 9.6 per cent yr-on-yr and 1.5 per cent month-on-month.
The report pointed to broad-primarily based growth in most retail mortgage segments. Home loans expanded by 12.2 per cent yr-on-yr and 1.3 per cent month-on-month in November, up from 0.9 per cent growth in October. Demand for residential housing is predicted to preserve this section steady.
Gold loans recorded vital growth, rising by 6.7 per cent month-on-month, contributing to 12 per cent of incremental retail loans in November.
The report famous, “In our view, slowdown in microfinance loans has increased the demand for gold loans as an alternate source of borrowings.”
On the opposite hand, automobile loans declined by 1.8 per cent month-on-month, reflecting subdued automobile gross sales.
Credit card receivables grew by 18.1 per cent yr-on-yr in November, up from 16.9 per cent in October.
However, receivables growth is greater than growth in spending by bank cards.