3 hrs ago
Indian Banks and NBFCs Report Strong Q2 Credit Growth
Banks and finance companies shared how their businesses did in the second quarter of FY27.
Many lent more money than they did a year earlier.
Small finance banks had especially fast growth in lending.
HDFC Bank also reported its strongest quarterly loan growth in more than two years.
Bajaj Finance added customers and approved a plan to raise more money.
Deposits from people living outside India helped banks with funds.
But getting money to lend may cost more, which could reduce some banks' profits.
The updates said asset quality was generally steady, with Ujjivan reporting improved bad-loan figures.
HDFC Bank also announced a new chief executive appointment approved by the Reserve Bank of India.
HDFC Bank's advances rose 16% year-on-year, with sequential growth of 5.2%, its strongest in nine quarters.
Small finance banks reported brisk lending growth, led by Equitas, Ujjivan and AU Small Finance Bank.
Bank of Baroda's advances grew 18.3%, while Bandhan Bank reported 13% credit growth.
Bajaj Finance's assets under management rose 26.5% to Rs 5,848 billion, and its board approved a Rs 175 billion capital raise.
FCNR(B) inflows supported liquidity, though higher funding costs may pressure lenders' margins.
- Who
- HDFC Bank, small finance banks, Bank of Baroda, Bandhan Bank and Bajaj Finance, among other financial institutions.
- What
- They reported second-quarter business updates showing credit, deposit and asset growth, alongside selected management and capital-raising developments.
- Where
- India; HDFC Bank also reported foreign-currency lending through overseas branches.
- When
- October 4; the updates covered Q2 FY27.
- Why
- The updates reported business expansion and funding conditions; FCNR(B) inflows supported liquidity, while higher funding costs could pressure margins.
Growth and liquidity
Costs and margin pressure
Strong lending versus funding costs
Growth and liquidity
The reported institutions posted credit growth, and FCNR(B) deposits helped support liquidity.
Costs and margin pressure
Higher costs of funds could pressure net interest margins despite strong loan growth.
Bajaj Finance capital raise
Growth and liquidity
Analysts said the additional capital should give Bajaj Finance more room to grow AUM while maintaining comfortable capitalisation.
Costs and margin pressure
The article reports the capital-raising plan but provides no stated opposing assessment.
Key facts
- HDFC Bank advances
- Rs 32,135 billion, up 16% year-on-year and 5.2% sequentially.
- HDFC Bank deposits
- Rs 33,275 billion, up 18.8% year-on-year.
- Ujjivan Small Finance Bank advances
- Rs 45,531 crore, up 31.6% year-on-year.
- Equitas Small Finance Bank advances
- Rs 50,694 crore, up 29.6% year-on-year.
- Bank of Baroda advances
- Rs 15,124 billion, up 18.3% year-on-year, above its 12–14% full-year growth guidance.
- Bajaj Finance AUM
- Rs 5,848 billion, up 26.5% year-on-year.
- Bajaj Finance capital raise
- Board-approved Rs 175 billion: Rs 117 billion through a QIP and Rs 58 billion through preferential warrants to Bajaj Finserv.
- Funding and margins
- FCNR(B) inflows supported liquidity; higher cost of funds may pressure margins.
Sources
Related news
Microfinance Lending Grows as Asset Quality Improves
HDFC Bank Q2 Growth and Bagchi Appointment Lift Emkay Outlook
Motilal Oswal Rates Six Banks Buy After Q2 Updates
HDFC Bank Deposits Grow Faster Than Advances in September Quarter
Bajaj Finance Growth Forecasts Rise as Capital Raise Risks Dilution
Indian Banks Report Strong Loan Growth in September Quarter
Brokerages Favor PNB, Canara, Indian Bank After Q2 Updates
Bandhan Bank Loans Rise 13%, Deposit Mix Remains in Focus
Moneyboxx Finance Secures ₹84 Crore Fresh Debt Funding
Bandhan Bank Shares In Focus As Ratings Highlight Recovery Risks
