India’s Leading BFSI Companies 2020

XVII During fiscal 2018, credit growth revived from anemic conditions prevailing in the recent years. Recent data based on supervisory returns suggest that the recovery in credit growth was sustained during H1 FY19. All categories; PSBs, PVBs and FBs; partook in this credit recovery. During H1 FY19, FBs recorded the sharpest upturn in credit growth; by contrast, PSBs’ loan books expanded in a more subdued manner, weighed down by impaired assets and stepped-up provisioning. An overwhelming share of deposits with SCBs has always comprised term deposits; especially in the one-to-two-year maturity bucket; due to higher returns across comparable financial assets. The year fiscal 2017 was, however, an outlier with the share of current account and saving account (CASA) deposits surging five percentage points above the five-year average because of the return flow of SBNs into bank deposits especially to PSBs. With the rapid pace of demonetization, growth in CASA deposits moderated in both PSBs and private sector banks (PVBs) while it increased in foreign banks (FBs) during fiscal 2018. Sectoral credit growth Sectoral Deployment of Gross Bank Credit (% y-o-y growth) During fiscal 2018, bank credit to agriculture decelerated, partly reflecting pervasive risk aversion and debt waivers by various state governments, which may have disincentivized lending to the sector. Credit growth to industries turned positive in November 2017 after a hiatus of 13 months, but it remained anemic. Credit to NBFCs picked up, especially to those with high credit ratings. Personal loans continued to register robust growth in fiscal 2018. During fiscal 2019 credit growth reached double digits, largely driven by services sector lending and personal loans. Return ratios Return on Assets (%) Return on Equity (%) -0.4 0 0.4 0.8 1.2 FY13 FY14 FY15 FY16 FY17 FY18 FY19 -4 0 4 8 12 16 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Dun & Bradstreet