While growth continues to be driven by large industries, trade services, NBFCs and retail, the mid-corporate segment is still exhibiting weak credit offtake, says Religare Capital Markets
February credit data released by the Reserve Bank of India (RBI) indicates that credit pick-up remained lacklustre during the month, growing at 1.2% month-on-month. On a year-on-year basis, growth stayed muted at 14.6%, down from 14.9% in January 2013 and 15.2% in February 2012. While growth continues to be driven by large industries, trade services, NBFCs (non-banking finance companies) and retail, the mid-corporate segment is still exhibiting weak credit offtake, says Religare Capital Markets.
As per data available till 22 February 2013, non-food credit growth was at 9.2% in 11MFY13 (up from 7.9% in 10MFY13; averaged 12%-13% during FY07-FY12). Year-on-year growth remained muted at 14.6% in February versus 14.9% in January.
Mid-corporate segment sees sharp dip month-on-month, SME picks up and large corporates steady. The mid-corporate segment continues to see lower credit deployment with outstanding advances to the segment shrinking 6.5% month-on-month. SME credit growth picked up by 2.9% month-on-month. Growth in the large corporate segment was ahead of overall credit growth at 18.7%. Despite moderating from 24.3% in FY12, this segment remains the key driver.
Power and other infrastructure (ex-telecom) segments have been the primary drivers of credit growth, accounting for 43%/56% of the total incremental credit towards industries in the past 12 months/11MFY13. With strong growth year-to-date, the proportion of power sector loans has remained at elevated levels, contributing 19.1% of total industry advances in February’13 versus 16.7% in March’12.
Power/Road advances increased by 1.7%/1.9% Memorandum. Telecom sector exposure has remained flat month-on-month at Rs 920bn (-2% year-to-date). Overall infrastructure exposure remained flat at about 33.6% of industry credit.
Services loan growth picked up 2%. Within the services sector, growth continues to be driven by trade (up 33.8% year-) and NBFCs (up 16.6% year-on-year). The transport operators segment remains muted, with total outstanding credit flat at Rs 723bn after falling 8% in two months. Credit growth in commercial real estate dipped to 8.2% year-on-year.
The unsecured loan portfolio also continues to grow at a healthy rate with credit card loans outstanding up 24% year-on-year.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )