In a conference call with reporters, HDFC Bank deputy MD Paresh Sukthankar said demand was primarily seen in the working capital segment. Excerpts:
Some banks have cut deposit rates. Is HDFC Bank as well planning a rate cut?
We have not yet taken a decision, although we have noted that liquidity in the system has eased a little and that deposit growth, at a system level, is outpacing loan growth. That has more to do with the fact that loan growth at the industry level had come down sharply. We will keep a watch on what is happening to deposit and lending rates in the market and take a decision in time. We do not see any compulsion to change rates immediately.
Which sectors contributed to the bank?s loan growth?
Our retail assets grew a little over 17%; the wholesale business grew about 22%. So both have done well. We have seen a pick-up in disbursements on a couple of fronts, notably in car loans and personal loans; these have continued to be upward of 20% growth. While the commercial vehicle/commercial equipment (CV/CE) business is growing at around 10%, the fact is that we just moved from flat and even negligible growth to a slightly positive one. On the wholesale side, the growth was more in working capital and medium- and some-term lending.
What is your outlook on credit growth?
First, the system growth has bounced back. If we believe that GDP growth is somewhere around 5.5%, I think a more reasonable number on the system loan growth should be closer to 12-13%, rather than 11%. If the system grows at somewhere close to 12-13%, we should grow a few percentage points faster than that.
Has there been any change in your mix of retail to corporate loans? What were the reasons for the improvement in your margins?
The mix has actually remained the same at around 53% from the retail segment and the remaining 47% in corporate loans.
With the RBI changing regulations on ATM withdrawals, are you rethinking your strategy?
In past few months, we moderated our growth rate in terms of ATMs. We continue to add ATMs, but not at the pace at which we were adding them a few years ago. So, right now, we have around 11,500 ATMs; we will continue to add a limited number. If the guidelines make it much more attractive for us to add more ATMs, we will review that policy.
