Banks had a blockbuster quarter. But don’t let that fool you

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₹20,698 crore in Q4, which is not only its highest-ever figure but also the biggest quarterly profit by any Indian bank. SBI also pipped India’s most valuable company Reliance Industries, which had logged a net profit of ₹18,951 crore in the quarter. Another state-run lender which delighted investors was Punjab National Bank, whose net profit soared almost three-fold to ₹3,010 crore, propelled by a jump in interest income and declining sour loans.

All the private sector biggies, too, are firing on all cylinders, with profit growth of nearly 20% amid healthy disbursals. One of the most conspicuous factors underpinning banks’ performance in the last quarter of 2023-24 was steady loan growth, in the range of 15-25%. The growth was primarily led by the high-yielding retail segment, with the corporate vertical staying flat or even posting a decline in some cases.

HDFC Bank, the country’s largest private sector lender, saw a 3.5% sequential uptick in retail loans, even as the corporate and wholesale book shrunk 2.2%. Both numbers were higher than the corresponding period in 2022-23, but year-on-year figures are not comparable as the bank concluded its mega merger with HDFC on 1 July 2023. The retail vertical comprises 50.6% of its loan book, followed by commercial and rural banking (CRB) at 32.3% and corporate and wholesale at 17.1%.

ICICI Bank, too, saw retail loans growing at a healthy clip of 19.4% on-year, driven by mortgages (up 14.9%), personal loans (up 32.5%) and credit cards (up 35.6%). Retail accounts for 54.9% of its total loans, while for Axis Bank, it is even higher at 60%. Despite the higher base, Axis Bank saw its retail advances grow 19.6% year-on-year, compared to small and medium enterprises (SME) at 17.7%