Your Money: Credit cards, personal loans up in Q2 CY19

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Published: February 17, 2020 1:15:27 AM

Origination volumes grew in credit cards and personal loans but declined or grew marginally for home loans, auto loans and LAP

TransUnion CIBIL, Credit cards, personal loans, LAP loan balances, NBFC, Auto loansOverall receivables grew 41% y-o-y led by 30% y-o-y volume growth and 8% y-o-y automatic transfer service (ATS) growth.

TransUnion CIBIL’s latest report (Q2 CY19) showed growth decelerating further across most consumer lending categories (13% y-o-y) due to moderating macro-economic conditions. Origination volumes grew in credit cards and personal loans but declined or grew marginally for home loans, auto loans and LAP. Asset quality was stable across products except LAP. Delinquency increased 50bps y-o-y for NBFCs and declined for private (9bps) and public banks (26bps).

Credit cards

Overall receivables grew 41% y-o-y led by 30% y-o-y volume growth and 8% y-o-y automatic transfer service (ATS) growth. About 45% of origination volumes come from consumers in the age group of 25-35 years. There was no major change in proportion of below-prime customers in originations. Unsecured loan products have lower headline delinquency ratios primarily on account of higher write-offs, data that is not available in the public domain.

Personal loans

Overall personal loans grew 28% y-o-y led by 48% yoy volume growth, but 14% yoy decline in ATS to Rs20 lakh. Origination volumes have grown 134% yoy, primarily driven by NBFCs. NBFC balances and loan accounts in the micro loan size segment (ATS< Rs25,000) grew more than 5X y-o-y indicating a continued focus on smaller value personal loans.

Mortgage portfolio

Mortgages grew 10% y-o-y led by 4% yoy volume growth and 6% y-o-y growth in ATS at Rs1.3 million. ATS for private banks has come down marginally (Rs3.2 million from Rs3.4 million y-o-y) with increased focus on affordable housing. Home loan balances for HFCs have decelerated (8% y-o-y growth in 2QFY20 vis-à-vis 23.2% y-o-y in 2QFY19).

LAP loan balances grew 12% y-o-y led by 19% y-o-y volume growth and 6% y-o-y decline in ATS. ATS dropped sharply for NBFCs (Rs1.2 million y-o-y from Rs1.9 million). Fewer loans (15% of total originations vis-à-vis 23% yoy) were disbursed to new-to-credit customers.

Auto loans

Overall, auto loans grew 10% y-o-y led by 11% y-o-y volume growth and marginal ATS decline. Auto loan balances for NBFCs grew 16% y-o-y, but ATS declined 17% y-o-y. Below-prime customer originations increased y-o-y from 27% to 31% of total originations. 90-Days Past Due (DPD) delinquencies declined for private and PSU banks, but increased for NBFCs.

Edited extracts from Kotak Institutional Equities Research report

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