SBI home loan portfolio rises Rs 4,800 cr in Q3

Written by Vishwanath Nair | Pranav Nambiar | Mumbai | Updated: Jan 10 2013, 06:33am hrs
Lower interest rates, better schemes and a general festive demand has helped State Bank of India (SBI) increase its home loan portfolio by around R4,800 crore in the three months ended December 31.

This is higher than the R4,700-crore growth added during the January-March quarter in 2009-10 when the teaser loan scheme was helping the bank expand its base.

The banks total home loan portfolio stands at around R1,13,000 crore as on December 31, a senior official of the bank said.

SBIs home loan portfolio saw incremental disbursals of R1,800 crore in December, compared with Rs 1,400 crore in November and R1,600 crore in October, according to the official.

Over the quarter, support also came from customers switching loans to SBI under its special scheme. According to the scheme, customers are not required to bring in an interim guarantor while shifting their loans to SBI from another lender. Nearly R2,000 crore worth of home loans were added from other banks. In the three months ending September 30, the state-owned lenders home loan portfolio had grown by 13% year-on-year to R1,08,381 crore.

In case of its nearest competitor, Housing Development Finance Corporation (HDFC), the individual loan segment stood at R1,01,900 crore on September 30. The individual loan segment includes fixed and floating rate home loans, home improvement loans, home extension loans and short-term bridging loans.

SBI currently offers a rate of 10% for home loans up to R30 lakh and a rate of 10.15% on home loans above R30 lakh, which is the lowest in the industry.

The retail prime lending rate (RPLR) for HDFC stands at 16.5%.

Prior to this, SBI had cut its base rate by 25 bps to 9.75%, in September. The bank, in October, had then reduced processing fees on home and car loans by 50 bps up to December 31. Prior to this, the bank had reduced lending rates on home and auto loans by 60 bps in August.

Many lenders including Union Bank of India, IDBI Bank, Federal Bank, Oriental Bank of Commerce and Karnataka Bank had announced special schemes to boost their portfolio during the October-December period. HDFC Bank, too, reduced its base rate by 10 bps on December 30 to 9.7%.

Banks have been depending on retail loans to grow their advances during this year.

As per monthly data by the RBI, retail credit for November grew by 16.3% from a year ago to R8,58,000 crore.

Of this, loans to the retail housing segment, which includes priority sector housing, grew by 13.23% from a year ago to R4,37,200 crore, marginally lower than the 13.6% year-on-year growth recorded in the previous year.

Although high property prices and tough operating environment could continue to temper the number of home transactions, possible softening in home loan rates, attractive schemes offered by the banks and higher ticket sizes (because of higher property prices) could support a 17-19% growth of the Indian mortgage market in 2012-13, ICRA said in a report in December.