Wait for biz loan pickup could get longer on limited capex

livemint.com:

Bank of India (RBI). Bank credit to large industries showed a growth of 6.1% in the same period. Although the merger of erstwhile Housing Development Finance Corp.

(HDFC) with HDFC Bank aided the retail numbers, individual loans would have grown 18.2% without it. Dinesh Khara, chairman, State Bank of India (SBI) is hopeful of corporate loan growth in the coming quarters and has seen some signs of improvement in utilization of term-loans and working capital that have already been sanctioned. While SBI’s total loan book grew 12.4% y-o-y in the three months through September, corporate loans increased 6.6%.

“We have got undisbursed portions of some sanctioned (but) unavailed limits of term-loans. In term-loans, we have seen that availment has improved by almost about 100 basis points in this quarter as compared to the previous quarter," Khara told analysts on 4 November. Meanwhile, an analysis of data on gross fixed assets of companies by Bank of Baroda showed that while the stock of fixed assets grew 3.6% during the April-September period and was higher than the same period last year, it was still subdued.

The growth was 7.9% on a y-o-y basis. The analysis considered the gross fixed assets and capital work in progress of 1,420 companies as an indicator of capital expenditure (capex). Industries where fixed assets grew faster than the overall y-o-y growth rate included infrastructure at 18.3%, crude oil (14.1%), iron and steel (8.9%), capital goods (8.6%) and retail (19%).