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Indian Banks Report Strong Q4: Loan Growth Accelerates
3 Jan
Summary
- Banks expect double-digit growth in advances and deposits for the December quarter.
- Loan growth for Indian Bank and Bank of India is projected at 14.5% and 15.1%.
- Consumption-driven economy and festive season fueled bank performance in Q4.
Indian banks are projected to witness a significant surge in both advances and deposits during the December quarter, with provisional data from ten institutions indicating double-digit growth. This trend reflects a robust performance driven by strong economic activity.
The December quarter has been favorable for the consumption economy, significantly boosted by GST reforms and the festive season. This environment has enabled banks to achieve substantial loan growth, with entities like Indian Bank and Bank of India anticipating rises of 14.5% and 15.1%, respectively. Private sector banks such as Tamilnad Mercantile Bank and CSB Bank are also expected to outperform, with advances projected to increase by 16.3% and 28.7% year-on-year.
On the liabilities side, while deposit growth is generally healthy, some banks like Union Bank of India and Punjab & Sind Bank are expected to report single-digit increases. Experts suggest that while reduced special deposit schemes have helped control deposit costs and support net interest margins, garnering low-cost current and savings account deposits will continue to be a challenge. Treasury income is also anticipated to remain subdued due to hardening yields.
